MPACTS OF FINANCIAL MANAGEMENT ON EQUITY-CROWDFUNDED FIRMS’ PERFORMANCE

Small and Medium Enterprises (SMEs) frequently face financial limitations and challenges in financial management. The introduction of equity crowdfunding (ECF) has added a new dimension to alternative financing in Malaysia. Since its inception in 2015, ECF has seen widespread adoption, showcasing the pivotal role of ECF platforms in connecting fundraisers with investors, thereby aiding SMEs in securing funding and investors in attaining returns. This study investigated two aspects of financial management, namely financial analysis and reporting and Financial Planning and Control (FPC). Performance was assessed using financial metrics (Model 1) and Customer Performance (CP) as a non-financial metric (Model 2). Surveys were digitally distributed to 231 respondents, representing issuers who had successfully raised ECF funds from 2016 to 2019. This “authority of the sender” tactic was employed to ensure that the survey reached the appropriate respondents. Ultimately, 92 respondents met the study’s criteria. The research drew on the theory of financial bricolage, utilising statistical tools like SPSS 20.0 and Smart-PLS 3.0. The findings indicated that Models 1 and 2 were compatible only with FPC. However, FPC had a negative impact on the CP metric, possibly due to FPC overlooking other factors that improve customer performance.