According to a 2017 crowdfunding report from PwC, women do substantially better on crowdfunding platforms than their male counterparts. Berkeley-Haas School of Business and the Kellogg School of Management found that women are effectively better storytellers than men, which helps them perform better on crowdfunding platforms.
Karen Cahn is not surprised: "Ladies, let's not forget, we are naturally good at this!" she says. Cahn is the CEO of iFundWomen, a crowdfunding platform for women-led startups and small businesses.
In a piece for Project Entrepreneur, Cahn lends her expertise as she busts common crowdfunding myths and encourages women to utilize crowdfunding to launch or grow their businesses:
MYTH: Crowdfunding means I'm giving away equity in my company.
REALITY: Rewards-based crowdfunding platforms, like iFundWomen, allow you to sell products or services in exchange for cash, similar to an e-commerce transaction. This means you are keeping 100 percent of your company, and you are not giving away equity in your company. Nor is it a loan--you don't have to pay the high-interest rates women receive on small business loans.
MYTH: People will organically find my project.
REALITY: Everyone loves to talk about the crowdfund that raised millions of dollars in nanoseconds. The reality is a successful crowdfunding campaign, like a business, requires planning, marketing, and a clear strategy. You have to get out your megaphone, well in advance, and start telling your tribe that your campaign is coming up, then ask them if you can count on them for support.
Jen Coulombe from Sat Nam Babe started a line of baby yoga clothes made from recycled plastic bottles, and she announced her campaign more than six months before launch! She blogged, posted, and gave everyone the heads up that her campaign was coming soon.
And guess what? It worked.
Within the first week of her campaign, she was over 50 percent funded. She kept the heat up on her marketing throughout her 30-day campaign, unwavering in her energy, and she got fully funded. It's all about pre-planning and pre-marketing.
MYTH: It's embarrassing.
REALITY: It's empowering! You are finally showcasing your hard work to the world and selling your product to your first customers--get psyched! This is what you've been working so hard for: product-market validation and actual paying customers.
When you crowdfund, you don't have time to go through any shame spirals. As part of my crowdfund for my first company, Sarah Sommers and I literally panhandled on the streets of New York to get our campaign funded on a 100-degree day in mid-July.
We had no shame, and neither should you. It was also an awesome bonding experience--so grab a co-founder or friend and hit the streets.
Accept cash and then put it in your campaign. Go have a bake sale. Host a crowdfunding party at your house, and get your girlfriends together for wine and fun. Get creative with how to engage your friends, family and followers, and sell them the rewards they want to buy.
Women are natural storytellers because we are able to connect emotionally--which is critical to a successful crowdfund. Crowdfunding requires putting yourself out there to tell the story of your business, highlighting your own successes, and promoting yourself.
The confidence gap is real, but that is where coaching comes in. Mentors and a supportive community of fellow entrepreneurs will empower you to put yourself out there to realize your goals.
MYTH: Crowdfunding will be a distraction from my overall strategy.
REALITY: Crowdfunding should be a central part of your business strategy.
A crowdfunding campaign is work: four weeks of pre-planning and four to six weeks of full court fundraising. Whether you are an early stage startup trying to prove there's a market for your product or an existing business looking to fund your growth, a crowdfunding campaign should be a key part of your go-to-market.
You can crowdfund and grow your business at the same time, and if you work hard enough, you can leverage your campaign to create long-lasting lucrative partnerships for your business. That's the crowdfunding dream come true!
Crowdfunding validates product-market fit; investors view a crowdfund as an initial gate to prove there's a market and regularly require a crowdfund before investing venture capital dollars. Crowdfunding can also help refine marketing your marketing strategy and de-risk your launch: people get to know you and your business/product and give you real world feedback.
Launching or growing your business is all about maximizing your opportunity and limiting your risk. The single most efficient way to do that is through crowdfunding.