A whole new world: Counterintuitive crowdfunding insights for female founders

https://doi.org/10.1016/j.jbvi.2021.e00235Get rights and content
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Highlights

  • Much advice of traditional venture finance does not apply to crowdfunding.

  • Counterintuitively, female crowdfunding entrepreneurs should:

    • Highlight their gender.

    • Talk about their female perspective.

    • Avoid promotion language.

    • Found ventures in male-dominated sectors.

    • Set bigger campaign goals.

    • Crowdfunding investors differ from those of traditional venture finance in that they are more often female and less financially motivated.

  • The different investor profile suggests that we should develop reevaluate strategies to attract funding in the context of crowdfunding.

Abstract

Female entrepreneurs are subjected to stereotypes that make it difficult to secure funding. Crowdfunding challenges many of the causes of this discrimination but we know little about if and how it changes optimal funding strategies for female entrepreneurs. Using a sample of 3191 crowdfunding campaigns by female entrepreneurs, we draw from signaling theory to develop and test a series of counterintuitive conjectures for female crowdfunding success. Our results contradict advice that may be derived from traditional entrepreneurial finance: women in crowdfunding should use their gender as advertising, use more female-centric language, avoid self-promotion, start businesses in male-dominated sectors, and ask for more money. These findings highlight new theoretical mechanisms in crowdfunding and develop recommendations for female entrepreneurs who want to raise funds.

Keywords

Crowdfunding
Female entrepreneurship
Gender
Signaling theory

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