Several studies have shown that men get far more venture capital funding than women—something to the tune of 12 to 1. But one new study offers some good news: Women outperform men on crowdfunding sites like Kickstarter.
Jason Greenberg of New York University and Ethan Mollick of the University of Pennsylvania’s Wharton School compared the funding success rates on Kickstarter of startups run by women versus men. The researchers found that women-led ventures—particularly technology firms—were more likely to reach their funding goals than male-led ventures.
For example, 65 percent of all women-led tech startups reached their funding goal on Kickstarter versus just 30 percent of men-led tech startups. But across the board in all industries reviewed by the study, women-founded ventures prevailed. Overall, 37 percent of all women-led ventures were funded compared to 32 percent of male-led ventures.
The authors conclude that a main reason for this Kickstarter advantage for women is that there are more women on Kickstarter who want to support women-led ventures. But it’s even more complex than that: There’s a particular subgroup of “activist” female backers who make a point of funding other women in industries in which women have been historically underrepresented, including tech.
This activism among women helping women is an encouraging sign, they note, that crowdfunding could revolutionize how women-owned businesses raise money:
By removing traditional gatekeepers to finance, such as VCs, and increasing pools of potential supporters, crowdfunding potentially mitigates the social barriers faced by female-founded (or co-founded) ventures by “democratizing entrepreneurship.” … The promise of crowdfunding is that by reaching out to a large pool of potential backers over the internet without face-to-face contact or networking, female founders may be able to overcome historical discrimination in accessing financing to start new ventures.
Read more articles on funding.
Photo: Getty Images