In recent years, equity-based crowdfunding (ECF) has emerged as a viable alternative for new ventures to overcome funding difficulties, not least in a time with funding difficulties for entrepreneurs. There is little research on the topic, and studies that have been conducted usually examine all the crowdfunding types together, but the differences between the various types demand the study of each type separately.

Little is known about entrepreneur’s use of this new phenomenon, why they select ECF and consequently not select traditional sources of capital, and what their experiences of equity crowdfunding are. The purpose of this thesis is thus to explore the use of equity-based crowdfunding by Swedish entrepreneurs. Specifically, the thesis focuses on motives to select this funding method, and experienced benefits and challenges of its use.

The empirical findings were collected through seven semi-structured interviews with Swedish entrepreneurs that had reached their ECF campaign funding goals. The basis for the interviews was built upon a literature review, and the research was carried out as an exploratory study using a qualitative and abductive approach.

The findings of this thesis indicate that the entrepreneurs were largely unaware of what the use of ECF entails, and that they primarily selected this funding method because of an inability to obtain capital from other sources. Moreover, this study details experienced benefits and challenges of this new funding method, by Swedish entrepreneurs. The key benefit discussed by our participants was that of obtaining brand ambassadors, and the major challenge was supporting and monitoring a large number of investors.