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Crowdfunding is a rapidly growing phenomenon in theory and practice. A significant gap exists between theoretical literature and empirical evidence regarding the volumes of crowdfunding and the quality of firms that use crowdfunding.

This is one of the first articles that offers a theory of entrepreneurs' choice between debt, equity and crowdfunding (reward-based). It uses a game-theoretic model where information about the expected quality of products developed by entrepreneurs is asymmetric.

We argue that in most cases crowdfunding is at the end of pecking order. The payments in the form of pre-orders come before the project investment is made making the entrepreneur's profit independent of actual quality of the product creating a strong ground for cross-subsidies of low-quality entrepreneurs by high-quality entrepreneurs in a pooling equilibrium.

The paper is consistent with some well-known empirical phenomena on crowdfunding, e.g. relatively small volumes of crowdfunding vs traditional funding, low volumes of reward-based crowdfunding vs debt-based and equity-based crowdfunding and excess entry of low-quality firms to crowdfunding market. We further compare this approach with an approach based on asymmetric information about the cost of production/investment (as in Belleflamme et al. (2014) and some other papers) and argue that even though some predictions maybe close under some general assumptions both approaches lead to qualitatively different results.

Extant studies in entrepreneurship have explored factors that influence the birth and growth of start-up firms; however, there appears to be a dearth of studies examining the influence of founders' ambidextrous orientation on start-ups' success, especially their speed of attaining the coveted status of a “unicorn start-up” – which is considered a mega success in practice. This study examines whether and how founding teams’ collective ambidextrous orientation influences their respective start-ups’ pace of becoming a “unicorn”.

This study empirically analyses 220 interviews by the founders of 83 Indian unicorns in examining the influence of the founding teams’ collective exploration-exploitation capability on their firms' speed to achieve the “unicorn” status. The Cox Hazard model was used to test the hypothesized relationships, and linear ordinary least squares (OLS) regression was used to test the robustness of the results.

The authors find a strong positive relationship between founding teams’ ambidextrous skills and the speed of becoming a unicorn. The study results suggest that the founding teams’ collective exploratory skills may be more influential in their start-up’s speed to unicorn status vis-à-vis their exploitative skills.

This study finds that the founding teams’ ambidextrous orientation and exploratory skills accelerate their start-up’s speed to becoming a unicorn, contributing to the academic discourse on the “unicorn” phenomenon, which is widely acknowledged as a grand success status for start-ups—especially technology and venture capital funded start-ups—among the practitioners. This study contributes to the academic discourse on firm capabilities and founding-team-related antecedents of start-up success by raising a new dimension of the founding team’s ambidextrous orientation.