Entrepreneurship plays an integral role in innovation, job creation and economic growth, and financing is a key component in facilitating this process. In recent years, the financing industry has taken significant technological leaps forward—perhaps most notably through the introduction of alternative solutions to institutional investors, such as crowdfunding. At the same time, the distinct economic role of these new technologies is still largely unknown.

The study aims to examine why growth-oriented entrepreneurs in Sweden choose equity-based crowdfunding.

The findings are analyzed through the lens of the pecking order theory, i.e., the notion that entrepreneurs select the cheapest and least risky way to finance a given solution. This article builds on qualitative research with a multiple case study with five cases. The primary data is collected through semi-structured interviews following a topic guide and secondary data from investment material.

Further, entrepreneurs choose external equity because of growth and network, and specifically crowdfunding is selected due to ambassadors, marketing, credibility, control keeping, and as a process to become a listed company. The results show that crowdfunding interrupts the pecking order theory.