Not just for the money: An application of the Self-Determination Theory to decode investment decision-making in equity crowdfunding

Sabia, L., Bell, Robin ORCID: https://orcid.org/0000-0002-7325-4277, Bozward, D. and Maas, G. (2025) Not just for the money: An application of the Self-Determination Theory to decode investment decision-making in equity crowdfunding. Venture Capital. pp. 1-22. ISSN 1369-1066

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Abstract

Contrary to the mainstream view that crowdinvestors make investment decisions for utilitarian motives like financial returns, this study suggests that making an investment decision in equity crowdfunding is multifaceted. Drawing on Self‐Determination Theory and incorporating insights from Prospect Theory, the research is based on 15 semi‐structured interviews with crowdinvestors from the US and Europe, representing nine equity crowdfunding portals. With the aim of exploring the psychological dimensions underpinning the motivation in their investment decisions, through a combination of thematic and framework analysis, the study found that psychological dimensions of motivation like personal agency, eudaimonic well-being and self-transcendence influence the decision to participate in equity crowdfunding fostering self-efficacy, self-actualisation and social wellness; that is, they provide a sense of self-endorsement to take on the risk associated with an investment choice. The study proves that such self-validation acts as a form of cognitive reappraisal to make decisions in uncertain contexts. It contributes to literature by extending prior applications of Self-Determination Theory to equity crowdfunding through new empirical insights on the psychological factors behind investor motivations. Also, the study for the first time combines SDT with Prospect Theory while providing actionable insights for leveraging communication tools that foster investor agency and active participation.

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