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Cognitive Processes of Signal Set From Entrepreneurs and the Importance of Herds in Equity Crowdfunding

Daniel Dao et al.

Entrepreneurship Theory and Practice2026https://doi.org/10.1177/10422587261419472article
FT50AJG 4*ABDC A*
Weight
0.50

Abstract

Drawing on a theoretical framework associated with the cognitive perspective, we propose that investors will rely on heuristic cognitive processes when signals from entrepreneurs are congruent or imbalanced incongruent. However, when signals are balanced incongruent, investors will engage in systematic cognitive processes that incorporate additional information from the herding behavior of other investors. We find evidence supporting our hypotheses in a sample of campaigns listed on a UK equity crowdfunding platform. Further analysis employing advanced machine learning techniques reveals that investors engage more in systematic processes when signals from entrepreneurs are in a weak form of balanced incongruence rather than a strong form.

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https://doi.org/https://doi.org/10.1177/10422587261419472

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@article{daniel2026,
  title        = {{Cognitive Processes of Signal Set From Entrepreneurs and the Importance of Herds in Equity Crowdfunding}},
  author       = {Daniel Dao et al.},
  journal      = {Entrepreneurship Theory and Practice},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1177/10422587261419472},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.