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Study Says Women Outshine Men at Crowdfunding

Women entrepreneurs usually have a hard time in raising money for their business ventures when compared to men. This gender gap is seen in bank lending and getting other government approvals where often males try to dominate. Women founders are trying to solve such issues by using seed crowdfunding platforms to reach their funding goals. Seed crowdfunding is the use of ‘rewards based’ crowdfunding platforms to fund the creation, launch or development of new businesses, products and services where backers pay upfront for a product, service or project.

Based on a recent analysis report released by The Crowdfunding Center and PricewaterhouseCoopers (PWC), it has been found that women are more successful than men in raising funds from large groups of anonymous donors through online campaigns. PWC in tie-up with The Crowdfunding Center did a research based on two years of seed Crowdfunding data collected from nine of the globally top crowdfunding platforms.

crowdfunding

crowdfunding

Women unbound: Unleashing female entrepreneurial potential

They released the research report titled “Women unbound” in July 2017 which analysed more than 450,000 seed crowdfunding campaigns across the globe. Based on this study, it was found that Women-led campaigns have been more successful in reaching their funding targets when compared to male-led campaigns. The data revealed that seed funding campaigns organized by women entrepreneurs during the years 2015-16 across various sectors and geographical domains witnessed 32% more success when compared those conducted by male entrepreneurs.

It also showed that Women entrepreneurs in Asia are twice as successful as men.  Among the largest markets for seed crowdfunding campaigns, namely the U.K. and the United States – 26 percent of female-led campaigns achieved their funding targets as compared to 20 percent of male-led campaigns. It was also found that many female-led projects achieve a greater average contribution than male-led projects: on average each individual supporter contributes $83 to men and $87 to women.

Crowdfunding websites like Kickstarter and Indiegogo are preferred by women entrepreneurs who wish to raise money for their new projects.  According to The Crowdfunding Center, more than $767 million was raised in 2016 from the 9 biggest crowdfunding platforms when compared to just $10 million in 2009.

Top 3 Sectors

The Top 3 sectors which enjoyed the maximum success for female-led crowdfunding campaigns were as below,

  1. Entertainment & media: 30 percent
  2. Retail & consumer goods: 22 percent
  3. Hospitality & leisure: 21 percent

Sherwood Neiss, principal at Crowdfund Capital Advisors told the media that Women are often discriminated against men in various ways including funding for business ventures.  She also told that Crowdfunding democratizes access to capital and it is the most trending method used by women entrepreneurs. Regardless of their gender, most crowdfunding investors felt the use of emotional and inclusive language in females’ pitches more appealing than the business language commonly adopted by men.

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