A new study has revealed that women outperform men when it comes to online crowdfunding.
The academic study, Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding, from the Social Science Research Network (SSRN) found that females lead the field when it comes to reaching crowdfunding goals in almost all areas of business, and especially in technology projects.
Online crowdfunding website Kickstarter has seen tech projects with female founders hit a success rate of 65 per cent, as opposed to 30 per cent with projects led by males. What’s more, women are now 13 per cent more likely to reach their goals than their male counterparts.
And it’s not just on Kickstarter. In May this year, Edgar’s Mission Founder and Director, Pam Ahern, set a new record with her rapid six-figure fundraising campaign. Her project on Chuffed.org, to create a new hospice for rescued farm animals, earned $162,400 with an original goal of $50,000.
“Crowdfunding has been an incredible tool,” Ms Ahern told Dynamic Business.
One contributing factor behind the sheer success of women crowdfunders, is the power of women supporting women. Ethan Mollick, assistant professor at the University of Pennsylvania’s Wharton School of Business who co-wrote the Kickstarter study, said that he attributes the growing funding margin to “women who are activists who want to reach out and help other women.”
“It seemed on Kickstarter, that if you thought women were underrepresented in technology, you viewed the projects created by women as better than the projects created by men,” Mollick explained. “This sort of activist investor base lets people have different motivations for investing and possibly helps overcome some of the biases that have existed for women.”
Hebrew University also completed an analysis on Kickstarter, finding that 40 per cent of projects led by women were funded by female backers, almost double the 23 per cent of projects backed by men.
The success that women are having in crowdfunding capital is creating an entirely new funding model for certain businesses, such as the newly founded website PlumAlley.com.
Founded by former Wall Street investment banker Deborah Jackson, Plum Alley is an e-commerce and crowdfunding website that helps women raise the capital they need to get their business off the ground.
“I believe a company with both a strong mission and sustainable business model can change the future for women in a profound way,” she says. “Plum Alley and our community members believe women and their projects are so important that we focus exclusively on them.”
It is an unfortunate fact: males still far outnumber women in the world of entrepreneurs. Thankfully, this female-led rise in the world of crowdfunding may play a very important hand in closing that gap