  Recent years have seen an upsurge of novel sources of new venture financing
through crowdfunding (CF). We draw on 54,943 successfully crowdfunded projects
and 3,313 venture capital (VC) investments throughout the period
04/2012-06/2015 to investigate, on the aggregate level, how crowdfunding is
related to a more traditional source of entrepreneurial finance, venture
capital. Granger causality tests support the view that VC investments follow
crowdfunding investments. Cointegration tests also suggest a long-run
relationship between crowdfunding and VC investments, while impulse response
functions (IRF) indicate a positive effect running from CF to VC within two to
six months. Crowdfunding seems to help VC investors in assessing future trends
rather than crowding them out of the market.
