Unpacking social capital and its impacts on lead investors’ fundraising success: evidence from equity crowdfunding syndicates

A crowd of investors (co-investors) uses online syndicate investment platforms to co-invest with professional angel investors (lead investors) in entrepreneurial firms. This innovative form of entrepreneurial finance provides new avenues for financing start-ups. Building on multidimensional social capital theory, this study advances our understanding of the role of social capital in determining lead investors’ fundraising success. Based on an analysis of 177 lead investors on AngelList, a U.S. syndicate investment platform, this study finds that the relational dimension of lead investors’ social capital on the platform positively affects their fundraising success. However, this positive effect is negatively moderated by lead investors’ location. In contrast, the effect of the cognitive dimension depends on lead investors’ location, whereas the structural dimension of social capital is not significantly associated with lead investors’ fundraising success nor is it moderated by location.