Promotion and prevention regulatory focus in equity crowdfunding reinvestment decisions

Using qualitative comparative analysis, our study draws on regulatory focus theory to examine how chronic promotion and prevention foci and situational factors are associated with reinvestment decisions in equity crowdfunding. Evidence suggests that both chronic promotion and prevention foci are sufficient conditions for reinvestment and that situational factors, particularly the absence of inhibitors related to information asymmetry, valuation difficulties, and exit constraints, play an important role. We also identify configurations incorporating the presence of inhibitor factors, which we interpret as consistent with investors adopting a speculative, bet-like approach. Our study offers practical insights for platforms and entrepreneurs by emphasising how transparent communication and risk disclosure can build investor trust and encourage continued investments.