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Many entrepreneurs are using the internet as a tool to achieve more financial support for their business or product idea, but more women are benefiting from it. A recently released paper titled, “Gender Dynamics in Crowdfunding: (Kickstarter)” by Dan Marom, Alicia Robb, and Orly Sade, found that women have an eight percentage-point advantage over men in effectively obtaining funds through the popular website.
Although women entrepreneurs only get 19 percent of angel funding and about six percent of venture capital, they tend to receive more funding due to the fact that there are more women investors on Kickstarter and women support them more. Similarly, men invest more in men. One main reason why women do not receive as much funding as men overall is due to women being more likely to not ask for money until they really need it, according to Robb in an interview with the Inc. website.
Kickstarter is currently one of the most popular crowdfunding, or angel funding, websites. The way Kickstarter works is by providing a platform for people to promote anything from a business to a product and try to receive funds for it. With the help of 7 million people, $1 billion funded close to 70,000 projects since 2009, according to the Kickstarter website.
The findings from the study were based off of research found on Kickstarter in April 2009 through March 2012. Out of those fundraising efforts, the researchers discovered that almost 70 percent of women were successful in completing their Kickstarter campaign and 44 percent of women made up the total number of Kickstarter investors.
The study also found that women raise the least amount of money, but were more successful in completing campaigns that were in the same category, subcategory, and goal amount than men. Moreover, the most popular categories for women were dance, food, or theater. In those categories, women still exceeded men in successfully gaining funds for their project. This suggests that it is beneficial for women to pick a category that they are more familiar with.
Crowdfunding is a new way for entrepreneurs to receive funding from non-accredited investors, which they are allowed to do under the 2012 JOBS Act, according to the paper. Robb told the Inc. website that she is hopeful that over time and as Kickstarter moves upstream, women will become more comfortable and invest larger amounts for their projects. To view the entire report, click here.