So you want to raise money for your company. What's the next step? It might depend on your gender, if you can believe the latest crowdfunding report from Price Waterhouse Coopers. Their finance team analyzed 450,000 seed crowdfunding across several platforms over two years. While men get most of the small business financing elsewhere, when it comes to the open frontier of crowdfunding, women are indisputably platform bosses.
Women get 11% more per pledge on U.S. crowdfunding sites
Aoife Flood of PriceWaterHouse Coopers, a study co-author, emailed me details: "Women obtain substantially more per pledge than their male counterparts--11% more per average backer pledge or 90 US dollars compared to 81 US dollars for male led pledges. The common denominator from this research is that in every country, culture and sector female crowdfunders are out performing male crowdfunders in achieving their funding goals. Based on this we can firmly say that women are better at seed crowdfunding than men."
Do people know they're backing women on crowdfunding sites?
I asked Aoife if possibly, given the fact that usually men get more loan funding and more venture funding, and well, more financing period, why the crowdfunding results were so different. Maybe the backers didn't know the gender of the entrepreneur?
Aoife dismissed that line of thinking. "With seed-crowdfunding, it is clear to the crowd who they are funding based on the video and written pitches that promote each campaign. What is different is that anyone can be part of the crowd. Ultimately seed crowdfunding provides the opportunity for anyone in the world to ultimately become a mini-vc. And in this world, the quality of the pitch and the product or service being pitched is often much more important than the person doing the pitching."
Crowdfunding and the rise of the mini-VC: you
It all comes down to the lack of bias in the decision maker--that's you, the customer. "Via traditional finance channels we see women-owned and women-led businesses receive much less funding than their male counterparts and one of the most pertinent has to be the complete dearth of women in the traditional financing world," she wrote. In fact, she quoted back to me venture capital stats I know all too well as the first women to launch a venture capital firm in Georgia about the lack of women decision makers in venture capital. It's just as bad or worse when it comes to women getting venture financing. Despite the fact that 1 in 5 tech entrepreneurs are female, only 2% of venture financing last year went to women-led startups.
"The fact is that each of us is programmed with blindspots, and whether conscious or unconscious we are drawn to people like us or who remind us of ourselves," said Aoife. "Ultimately, this leads to biases in funding decisions."
Crowdfunding has the most diverse decision-making.
Where do you go for the least bias, most appreciation? You go to the most diverse decision making base--crowdfunding sites. Globally, the trend is women are able to get their business message across there better than elsewhere, where the fundraising channel is often mediated by men.
"When it comes to the success of female-led campaigns (success is measured by way of them meeting their funding target) we see Denmark, Ireland and New Zealand come out jointly on top with female success rates of 33% Sweden and the UK come next with a success rate of 26%, while for the US and France female-led campaigns rank joint third for success with 24% of female-led campaigns achieving success compared with 20% of male-led campaigns in the US. Ultimately this makes female crowdfunders 19% more successful overall at achieving their seed crowdfunding financial targets than male crowdfunders in the US," she wrote.
Manoj Kashyap, PwC's Global Fintech Leader, commented that these findings, "pose a strong challenge to existing entrepreneurial and business norms by seriously questioning whether there are deep-rooted biases that are preventing greater access to funding by female entrepreneurs." The bias is there, but at least these platforms help level the playing field by getting entrepreneurs' business ideas directly in front of the customer and ultimate decision maker: you.