Recent Study Shows that Crowdfunding Could Eliminate Gender Inequality in Entrepreneurship

Recent Study Shows that Crowdfunding Could Eliminate Gender Inequality in Entrepreneurship

0 885
Photo credit: Flickr user Tax Credits (Creative Commons)

A recent entrepreneurship study showed that crowdfunding could be an important resource for female entrepreneurs. The research, conducted by Kauffman and the Hebrew University of Jerusalem, claims that women account for 44 percent of investors on Kickstarter, a popular crowdfunding website.  Comparatively, female entrepreneurs only received 2.7 percent of venture funding between 2011 and 2013.

Another study, conducted by Assistant Professor Ethan Mollick of the University of Pennsylvania’s Wharton School of Business and Professor Jason Greenberg of New York University, found that women were 13 percent more likely to meet their fundraising goals on Kickstarter than their male counterparts. Interestingly, women in technology businesses were significantly more successful than men who used crowdfunding for technological ventures. Approximately 66% of women in technology reached their financing goals, compared to only 30 percent of men who utilized Kickstarter to raise capital.

Not only does crowdfunding increase the availability of venture capital for female entrepreneurs, it also provides a platform for female investors. Through websites, such as CircleUp and Crowdfunder, women can provide equity to businesses of interest – as opposed to Kickstarter and Indiegogo which attract rewards-based donations from customers. A new twist on business financing has also appeared in the form of peer-to-peer lending sites. Two popular peer-to-peer lending sites are Lending Club and the Funding Circle. These sites are a conduit for business loans instead of investments or donations.

Crowdfunding could help equalize gender inequalities for female entrepreneurs. If you are a women in entrepreneurship, you may want to consider crowdfunding as an additional option for raising capital.