Attracting Investors in Initial Coin Offerings: The Relevance of Specific Technological Capabilities for Fundraising Success

Drawing on signaling theory, we argue that signal vehicles for technological capabilities determine the fundraising success of initiacoin offerings (ICOs). We analyze data from 357 ICOs between 2014 and 2020 using linear regressions. In addition to the effects of signal vehicles for technological capabilities, we account for campaign and venture characteristics. Our results reveal that ICO start-ups raise funds more successfully when they publish their source code. By following the logic of diffusion theory, we alsofind that ICO investors have characteristics similar to those ofadopters of innovations. In this regard, we show that the effectiveness of signal vehicles for technological capabilities changes overtime. Specifically, the early majority of adopters prefers a public source code, while the late majority prefers an own blockchain.Furthermore, patents do not serve as signal vehicle for technological capabilities. Consequently, we provide guidance for start-ups on how to conduct successful ICO fundraising.