- BANK INSTABILITY SEEMINGLY COULD PUSH BORROWERS TO USE CROWDFUNDING AS A SOURCE OF EXTERNAL FINANCE. WE CONSTRUCT A NOVEL, HAND-COLLECTED DATA SET OF VENTURES' USES OF EQUITY CROWDFUNDING IN GERMANY, THEIR RELATIONSHIPS WITH BANKS, AND VARIOUS VENTURE TRAITS SINCE 2011. BY OBSERVING VENTUREBANK RELATIONSHIPS, WE CAN IDENTIFY IF VENTURES CONNECTED TO SHOCKED BANKS ARE MORE LIKELY TO USE CROWDFUNDING IN AN ATTEMPT TO SUBSTITUTE FOR CONTRACTING BANK CREDIT SUPPLY. OUR RESULTS SHOW THAT CROWDFUNDING IS SIGNIFICANTLY MORE LIKELY FOR NEW VENTURES THAT INTERACT WITH STRESSED BANKS. INNOVATIVE FUNDING SOURCES ARE THUS PARTICULARLY RELEVANT IN TIMES OF STRESS AMONG CONVENTIONAL FINANCIERS. BUT CROWDFUNDED VENTURES ARE GENERALLY ALSO MORE OPAQUE AND RISKY THAN NEW VENTURES THAT DO NOT USE CROWDFUNDING.