Dr. Matthias Schmitt

Articles in Refereed Journals

Hornuf, Lars; Schmitt, Matthias; Stenzhorn, Eliza (2018). Equity Crowdfunding in Germany and the UK: Follow-up Funding and Firm Failure, Corporate Governance: An International Review, 26 (5), 331-354. DOI

• Today, startups often obtain financing via the Internet through many small contributions of non-sophisticated investors. Yet little is known about whether these startups can ultimately
  build enduring businesses. In this article, we hand-collected data from 14 different equity
  crowdfunding (ECF) portals and 426 firms that ran at least one successful ECF campaign in
  Germany or the United Kingdom. We empirically analyze different factors affecting
  follow-up funding and firm failure. The findings show that German firms that received ECF
  stood a higher chance of obtaining follow-up funding through business angels or venture
  capitalists, but also had a higher likelihood of failure. The number of senior managers,
  subsequent successful ECF campaigns, and the number of venture capital investors all had
  a positive impact on obtaining post-campaign financing, while firm age had a negative
  impact. Subsequent successful ECF campaigns were significant predictors decreasing firm
  failure.
• Also published as: Max Planck Institute for Innovation & Competition Research Paper No. 17-09

Contributions to Collected Editions

Dorfleitner, Gregor; Hornuf, Lars; Schmitt, Matthias; Weber, Martina (2019). Allgemeiner Marktüberblick, in: Florian Möslein, Sebastian Omlor (eds.), FinTech Handbuch: Digitalisierung, Recht, Finanzen, 21-39. München: C.H. Beck.

Further Publications, Press Articles, Interviews

Dorfleitner, Gregor; Hornuf, Lars; Schmitt, Matthias; Weber, Martina (2016). FinTech-Markt in Deutschland - Abschlussbericht 17. Oktober 2016, 2016.

• German version

Hornuf, Lars; Schmitt, Matthias (2016). Success and Failure in Equity Crowdfunding, CESifo DICE Report, 14 (2), 16-22.

Monographies

Dorfleitner, Gregor; Hornuf, Lars; Schmitt, Matthias; Weber, Martina (2017). FinTech in Germany. Cham: Springer. DOI

• In this study, conducted on behalf of the Federal Ministry of Finance, we provide the first comprehensive analysis of the German FinTech industry. We quantify the market volume of the industry between 2007 and 2015. On the basis of this data, we also predict the future development of eight segments of the FinTech market, offering detailed forecasts for the years 2020, 2025, and 2035. Moreover, we provide a comprehensive overview of current trends and the drivers of growth that have affected the FinTech industry in the past, as well as the factors that could spur and hinder growth within it in the future.

Discussion Papers

Hornuf, Lars; Schmitt, Matthias; Stenzhorn, Eliza (2018). Equity Crowdfunding in Germany and the UK: Follow-up Funding and Firm Failure, Max Planck Institute for Innovation & Competition Research Paper, No. 17-09.

• Today, startups often obtain financing via the Internet through many small contributions of non-sophisticated investors. Yet little is known about whether these startups can ultimately
  build enduring businesses. In this article, we hand-collected data from 14 different equity
  crowdfunding (ECF) portals and 426 firms that ran at least one successful ECF campaign in
  Germany or the United Kingdom. We empirically analyze different factors affecting
  follow-up funding and firm failure. The findings show that German firms that received ECF
  stood a higher chance of obtaining follow-up funding through business angels or venture
  capitalists, but also had a higher likelihood of failure. The number of senior managers,
  subsequent successful ECF campaigns, and the number of venture capital investors all had
  a positive impact on obtaining post-campaign financing, while firm age had a negative
  impact. Subsequent successful ECF campaigns were significant predictors decreasing firm
  failure.
• Available at SSRN
• Also published in: Corporate Finance: An international Review, Special Issue: New Methods of Entrepreneurial Firm Financing: Fintech, Crowdfunding and Corporate Governance Implications, September 2018, Pages 331-354

Hornuf, Lars; Schmitt, Matthias (2016). Does a Local Bias Exist in Equity Crowdfunding? The Impact of Investor Types and Portal Design, Max Planck Institute for Innovation & Competition Research Paper, No. 16-07.

• We use hand-collected data of 20,460 investment decisions and two distinct portals to analyze whether investors in equity crowdfunding direct their investments and portfolios to local firms. The results suggest that investors exhibit a local bias, even when controlling for family and friends. In addition to the regular crowd, our sample includes angel investors who invest considerable amounts and exhibit a larger local bias. By contrast, well-diversified investors are less likely to suffer from this behavioral anomaly. The data further show that portal design is important for attracting investors more prone to having a local bias. Finally, firms engaging in equity crowdfunding overcome funding barriers by attracting investors at all distances. These findings corroborate regulation targeted to specific investor groups, advise managers of equity crowdfunding portals about their business model, and inform individual investors of their biases.
• SSRN