Mind the gap : is there an equity gap in Norway, and can equity crowdfunding close it?
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- Master Thesis 
When an entrepreneur starts a new company, accessing funding is essential. However, funding is not always easily accessible due to the lack of internally generated profits, operating history and collateral that could have been used to lower the risk for potential lenders or investors. Companies that introduce new technologies or business models with a large potential for growth will in many cases have larger problems accessing financial capital due to both a larger need for capital, but also a higher risk of failure. These companies are also especially important to for the society because they represent a small minority of fast-growth companies that generates a significant proportion of new jobs and economic growth in the economy. International researchers have identified so-called equity gaps in the financing of this category of fast-growing ventures. This paper explores the phenomenon of equity gaps in existing academic literature and examines whether such gaps exists in the Norwegian market for risk capital. The thesis also evaluates equity crowdfunding’s ability to close such gaps. A qualitative design using semi-structured interviews with leading risk capital investors as well as secondary sources were used to answer the research questions set forward. This approach was chosen due to the explorative nature of the paper and the lack of quantitative data. Overall, the interviews seem to point to the existence of an equity gap in Norway, but not investors all did not agree. The investors did also not agree on the size of the gap measured in the size of the investment. In addition, there were disagreements among the investors on equity crowdfunding’s ability to close the equity gap. The data collected from equity crowdfunding platforms did as well show that equity crowdfunding currently does not serve the investment sizes that the majority of investors identified as the equity gap. This paper concluded that there is an equity gap in Norway, but at the current stage equity crowdfunding is not a suitable solution to close or reduce the gap. This thesis contributes to the limited research on equity gap in Norway, as well as use a novel approach to evaluate equity crowdfunding’s ability to close the gap. The research in this thesis can be of interest to market participants, including entrepreneurs, investors and the government, to better understand why young companies fail to attract funding.