# Signals from Entrepreneurs and Investor Behavior The impact of herd psychology in equity crowdfunding - **Source:** [Entrepreneurship Theory and Practice](https://journals.sagepub.com/home/etp) - **Published:** 2026-03-04 - **Topic:** [Entrepreneurship](https://brifing.si/c/entrepreneurship) - **Original article:** - **On Brifing:** https://brifing.si/s/e27c929c-b32e-49e6-be06-3384ff5fda34 ## Signals from Entrepreneurs Entrepreneurs use various signals to promote their projects and attract investors. These signals play a crucial role in investors' decision-making processes. The consistency or inconsistency of these signals affects investors' cognitive processes. ## Cognitive Processes and Heuristics Investors often resort to heuristic methods in their decision-making processes. These methods simplify complex information, enabling quicker decisions. However, this can sometimes lead to incorrect choices. ## Consistency of Signals When signals from entrepreneurs are consistent, investors find it easier to make decisions. Inconsistent signals can confuse investors and complicate the decision-making process, determining whether the investment will proceed. ## Herd Psychology Herd psychology plays a significant role in crowdfunding. Investors make decisions by following the behavior of others. This is particularly evident in situations of uncertainty and influences investment decisions. ## Equity Crowdfunding Equity crowdfunding is a method where investors provide capital directly to entrepreneurs. In this method, investors' cognitive processes and herd psychology are crucial factors determining the success of the funding. ## Conclusion and Importance Signals from entrepreneurs and investors' cognitive processes directly impact the success of crowdfunding. Understanding these processes facilitates strategic decision-making for both entrepreneurs and investors. ## Sources covering this story - https://journals.sagepub.com/doi/abs/10.1177/10422587261419472?ai=2b4&mi=ehikzz&af=R — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._