By Kathleen Minogue – After analysis of nearly a half million crowdfunding campaigns, PwC in collaboration with The Crowdfunding Center has found that women are an average 32% more successful at reaching their funding targets than men across sectors and in every geography where campaigns are launched. The report entitled “Women Unbound: Unleashing Female Entrepreneurial Potential” released today also found that in the US and the UK campaigns run by women also command higher pledge amounts – on average $10 more than campaigns run by men.
Not only has an internationally respected organization outside the crowdfunding industry affirmed that women excel at raising capital via crowdfunding, but this report is particularly groundbreaking because it has found that crowdfunding effectively erases the bias of the “grey-suit-factor” influencing who receives traditional funding:
“What the data in this report shows clearly is that when women choose to access crowdfunding they are more than capable – and very often more capable than men. This undermines these traditional assumptions and casts things in a new light. It demonstrates that opportunities for women entrepreneurs have not been equal, but thanks to crowdfunding, female entrepreneurs can now access the market directly – and this makes a huge difference.”
Gender bias in terms of who gets funding has been the topic of many reports lately, including a study by The Diana Project that found that VCs with only male partners tended to invest in male-led projects and a Harvard Business School study that found that investors have a preference for pitches from attractive men even when women present similar content.
According to the Women Unbound report, this bias disappears when women seek funding via seed/rewards crowdfunding as a result of several factors. The most significant reason is the audience. The funders in crowdfunding are the crowd, a market that is made up of roughly 50% women and 50% men, who act as “mini-VCs” backing projects and businesses that they want to see created. Women also succeed because they use more emotional and inclusive language when communicating. As Kay Klug of The Crowdfunding Center explains:
“The ground rules are different for seed crowdfunding as compared with traditional marketing and selling, where you are telling a story and building a relationship rather than just appealing to a need. Women tend to be much more relationship focused so this often comes more naturally than for men.”
In spite of the fact that women are more successful at reaching their goals than men, they are significantly underrepresented. According to the data from nine of the largest crowdfunding platforms worldwide, men launch more campaigns and overall raise more money via crowdfunding. For example in 2015-2016, of the 63 campaigns that raised over $1 million, only 11% were led by women. These numbers were up from 2014 data, where women represented only 7% of campaigns over $1 million.
Seeing that crowdfunding, especially seed crowdfunding, has the power to level the access to capital playing field for women, the “Women Unbound” report culminates with a call to action to get more women crowdfunding and for “governments, funders, business advisors, educators, entrepreneurs and women and men to seize this opportunity to identify, quantify and remove the grey-suit-factor.” The page-long list of recommendations includes:
- for financial institutions, banks and VC firms to give crowdfunded businesses credit for the market validation and customer understanding their campaigns generate;
- for education and business support organizations to teach crowdfunding as part of every entrepreneurship program, and to ensure that all client facing advisors have a basic understanding of crowdfunding and how it can support more traditional funding;
- and, for women entrepreneurs to be inspired by the positive findings of the report to launch their own seed crowdfunding campaigns, as well as support the campaigns of others, and to participate in incubators and accelerators.
Making the recommendations of the report a reality is being supported by the subsequent publication of New Routes to Funding by Barry E. James, Founder of The Crowdfunding Center and a collaborator on this report. This book is the first crowdfunding guide to be written specifically for small business advisors and mentors.
PwC’s collaboration with The Crowdfunding Center on this report was inspired by their participation as a Corporate Impact Champion of the UN HeForShe programme. The UN’s HeForShe initiative enlists the commitment of both men and women to achieve gender equality for all.
Take action to close the funding gap for women entrepreneurs via seed crowdfunding by backing their campaigns and launching your own on sites including Women You Should Fund, a platform dedicated to supporting women-led teams.
You can read the full “Women Unbound” report and access tools for women to level the playing field via crowdfunding here.
About the Author
Kathleen Minogue – Founder & CEO, Crowdfund Better
Kathleen is a crowdfunding educator, speaker and advocate. After running her own successful crowdfunding campaign in 2012, she founded Crowdfund Better to guide entrepreneurs, small businesses, nonprofits, and creatives on using crowdfunding strategically to attain their financial, marketing, and business goals. A thought leader in crowdfunding, Kathleen is focused on utilizing crowdfunding to encourage entrepreneurship, economic development and job creation in local communities, especially for women, minority and rural entrepreneurs.