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Baranès, Edmond
, Hege, Ulrich
ORCID: https://orcid.org/0000-0003-4625-5212 and Kim, Jin-Hyuk
(2026)
Token Financing vs. Equity and Crowdfunding.
TSE Working Paper, n. 26-1730, Toulouse
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Abstract
We present a stylized model of three entrepreneurial financing methods based on two tradeoffs. First, token financing and crowdfunding reveal consumer-investors’ demand for the product prior to investment, but upfront purchase weakens the entrepreneur’s incentive to deliver. Second, token financing permits a bubble component in token value, but reduces consumer surplus because tokens are stored rather than consumed. We characterize the conditions under which entrepreneurs prefer each financing method. We show that token financing can fund socially efficient projects that cannot be funded through equity or crowdfunding, but leads to suboptimal consumption. Finally, we propose an implementable hurdle condition for regulators.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | March 2026 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | crowdfunding, entrepreneurial financing, initial coin offering, token regulation, utility token |
| Keywords (French): | financement participatif, ,, financement des entreprises, offre initiale de jetons, réglementation des jetons, jeton utilitaire |
| JEL Classification: | G32 - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure G38 - Government Policy and Regulation L26 - Entrepreneurship |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse Capitole |
| Site: | UT1 |
| Date Deposited: | 02 Apr 2026 12:28 |
| Last Modified: | 02 Apr 2026 12:30 |
| OAI Identifier: | oai:tse-fr.eu:131654 |
| URI: | https://publications.ut-capitole.fr/id/eprint/53011 |
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