When Crowdfunding, It Can Pay to Be a Woman: That's what a new study concludes

   "When women are looking for crowdfunding money, they can benefit by playing up the fact that they are women.

    When it comes to securing capital, women have traditionally had a much tougher time than men -- for instance, women-led ventures received only around 2% of total U.S. venture money in 2020.

    The conventional wisdom says that to boost their chances, women must play down traits traditionally associated with their gender: They should dress less feminine, speak with a deeper voice, use less makeup and so on.

    But a new paper in the Journal of Business Venturing Insights finds that the old advice doesn't hold true for online crowdfunding.

    In crowdfunding campaigns, the research found, women founders who highlighted their gender through the words and hashtags they used raised more funds than ones who obscured it. And when women entered into a male-dominated field, such as beer, technology or comics, they raised more funds than women who sought to launch in a nongendered or female-dominated sector.

    Crowdfunding appears to be less affected by factors that women face in securing venture capital, such as stereotypes about gender, says researcher HenrikWesemann, assistant professor for entrepreneurship at IE Business School in Madrid and a lecturer at the University of St. Gallen in Switzerland.

    "Most crowdfunding platforms offer a reward-based system, which encourages investors to put money into their passions," he says. "Also, a much larger share of investors in crowdfunding is female than in traditional settings, which changes investor dynamics and interests."

    For the study, Dr. Wesemann and his colleague, Joakim Wincent, a professor of entrepreneurship at the University of St. Gallen and at the Hanken School of Economics in Helsinki, Finland, looked at the crowdfunding sites Indiegogo and Kickstarter. They scraped the sites for data from 2010 to 2020 to investigate the success of female entrepreneurs in crowdfunding, and after some culling they ended up with 28,897 women-led campaigns.

    Then they assessed each pitch's linguistic styles, such as words that seemed to signal female language, like "femininity" or "maternity." They also looked for promotional language such as "growth" or "earnings," which is often associated with men.

    "All other things equal, women who use much feminine language raise, on average, 10% more funds than women who use little feminine language,"Dr. Wesemann says. For men, he says, "there is no statistically significant difference between those who use little or much masculine or feminine language."

    In a different test, Dr. Wesemann and his co-author looked at 3,191 female-run campaigns on Indiegogo, which offers users a "#femalefounder" hashtag option. A total of 18.9% of those campaigns used the hashtag -- and raised, on average, 62% more funding than the rest, nearly $4,300 more per campaign.

    Because crowdfunders are 45% female, Dr. Wesemann says, the desire to support other women is likely stronger than in venture capital, where less than 15% of decision makers are women, he says.

    Dr. Wesemann and his colleague also found an unexpected dynamic when women enter male-dominated niches in crowdfunding. Looking at 2,963 campaigns in male-dominated sectors on Indiegogo from 2010 to 2020, they found that the roughly one-third of them that were women-founded achieved, on average, 28% more funds than women founders in all other sectors, including women-dominated niches such as jewelry.

    For many women, Dr. Wesemann says, "When they see a female entrepreneur start a business in male-dominated sectors like technology, comics or gaming, they see someone who is pursuing her passion despite the adversity. And they want to support that."

    The lesson, says Dr. Wesemann: When it comes to crowdfunding, throw out the old VC guidebook. "Crowdfunding is a new, truly disruptive game, and it provides founders an opportunity to do things differently," he says." [1]

1. C-Suite Strategies (A Special Report) --- When Crowdfunding, It Can Pay to Be a Woman: That's what a new study concludes
Mitchell, Heidi. 
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 01 Aug 2022: R.7.