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Crowdfunded women better at reaching funding goals

 Keyboard, mobile screen and a pair of hands.
. In crowdfunding, as opposed to business angels, venture capital funds, and banks, the gender balance is more equal among the backers on Kickstarter. (Photo: Unsplash)
Published Feb 12, 2021

Backed up by women, female entrepreneurs at crowdfunding platforms reach their funding goals more often than men. Hadar Gafni at the Department of Industrial Economics and Management has mapped the gender patterns at crowdfunding platform Kickstarter.

The difficulty of finding financial support keeps holding women back, something that is a well-known fact - men are more likely to support other men.

For women, crowdfunding - raising capital among the grassroots - can be a way to get pass the male gate keepers. Kickstarter is today one of the most well-known crowdfunding platforms, and about one third of all projects launched since the start in 2009 have been created by women. This equals about 170,000 projects.

Portrait of Hadar Gafni.
Hadar Gafni.

A recent study from the Department of Industrial Economics and Management at KTH shows that when getting the chance, women do well when raising money through Kickstarter.

“These women are actually more likely than men to reach their funding goals”, says researcher Hadar Gafni , one of the researchers behind the study.

The reason seems to be the support from female backers. In crowdfunding, as opposed to business angels, venture capital funds, and banks, the gender balance is more equal among the backers on Kickstarter. That brings an advantage for women who want to raise money for their ventures.

The gender patterns from traditional ways of financing startups are the same within crowdfunding, according to the study. Male funders prefer to support male entrepreneurs and women support women - to a certain extent.

“Beyond the shared interests, I believe that some men are driven by either taste-based discrimination – sexism, in this case – and, or believing that male entrepreneurs will produce better outcomes, because women are less associated with entrepreneurship.”

Text: Anna Gullers

Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.

Different types of crowdfunding:

  • Donation-based – Contributors receive no financial return for their donation.
  • Rewards-based – Contributors receive some “reward”, typically a product or service that company offers.
  • Lending-based – Lenders are expected to receive their money back, with or without an interest (depending on the platform).
  • Equity-based – Funders become part-owners of the company by trading capital for equity shares.
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Last changed: Feb 12, 2021