You might be surprised to learn that women are more successful in raising funds from crowdfunding than men.
That’s despite the fact that far more men than women conducted crowdfunding campaigns, globally. In 2015 and 2016, 139,000 men vs. 55,000 women engaged in crowdfunding.
Crowdfunding, of course, is an alternate form method of raising money from people.
Most often billions of dollars are raised through the Internet sites such as on Indiegogo and Kickstarter, in benefit events, mail-order subscriptions and in other ways.
But women were more successful in attaining their objectives. Women had a 22 percent success rate compare to the 17 percent rate of men.
This surprising news was revealed by a study conducted by PricewaterhouseCoopers (PwC).
The data comes across the board – in different cultures, sectors and regions.
In the U.S. women accomplished a 24 percent success rate compared to men with 20 percent.
In Asian, women achieved a 14 percent rate while men only had a 7 percent success rate.
In education, 12 percent of women were successful but men were only 6 percent.
Even in the male-dominated bastion of technology, women beat men 13 to 10 percent.
Why women are more successful
There are a number of reasons why women dominate men in crowdfunding.
Women get a level playing field in crowdfunding because it affords more diversity between the sexes. Men are open-minded about gender, which means they were predisposed to invest in a woman’s enterprise.
Women connect better with prospective investors because their presentations contain less business-oriented language and are more poignant or emotional, which enhance their ability to connect with their prospects.
Discrimination is a factor
Crowdfunding works better for women because traditional fundraising, such as venture capital, is inherently mired in masculine tendencies. Only 7 percent of VC firms are led by women.
Such men believe women bring more risk and are less likely to generate profits. So VCs tend to prefer male-owned startups.
This translates into $300 billion in missed opportunities for women. (And I would argue men are missing out, too.)
The study indicates women and men can learn lessons from each other.
Men can learn to fine-tune the presentation approaches. Women can learn how to be more adventurous – they only garner 7 percent of the individual projects involving $1 million or more.
Authors of the study believe traditional funding sources – including banks, government agencies and business associations – should make a stronger effort to fund women-led projects.
They suggest launching training programs for women in pitching and marketing their projects, earmarking more capital for women, and urging more acceptance of crowdfunding as a tool in funding businesses.
From the Coach’s Corner, here are relevant articles:
Attracting Investors – Crowdfunding vs. Venture Capital — Despite its democratic approach, how crowdfunding – a vehicle to help entrepreneurs raise money – is remarkably similar to venture capital funding.
Want to Take Your Company Public? Here are 5 IPO Tips — Companies enter the IPO market for a myriad of obvious reasons – as an entrée to capital markets, for higher status and visibility, or to attract talented employees. In a lot of ways, credibility is king – here are five steps.
Applying for Bank Loan? Here’s How to Shorten the Process — Business owners generally have two concerns when trying to get a bank loan or line of credit. Either they can’t qualify or they face scrutiny beyond belief. Wouldn’t it be great to save time and shorten the process?
11 Best Practices for Women Wanting to be Entrepreneurs — Here are 11 strategic and confidence-building tips for women to succeed in their new businesses.
Why Women Receive Less Angel Funding Than Men — It’s well-known that women receive less angel funding than men, but it isn’t because of a male-oriented bias.
6 Best Mental Attributes of Successful Entrepreneurs — Becoming an entrepreneur is the hardest task you can imagine. The hours are long and you can expect a physical and emotional roller-coaster ride. A song made famous by Frank Sinatra explains it best.
How Bloggers Help Startups Get Venture Capital — Multi-million dollar venture-capital financing decisions are affected by bloggers and social media. That’s the conclusion from an academic study, “Putting Money Where The Mouths Are: The Relation Between Venture Financing and Electronic Word-of-Mouth.”
Want to Sell Your Products in Big-Box Stores? 6 Vital Steps — True, if you’re able to get your products into big-box stores, you can quickly scale your business. However, just remember there are pros and cons in selling to big retailers.
“People respond well to those that are sure of what they want.”