Gender difference in equity crowdfunding: an exploratory analysis

Abstract

Purpose Title II of the Jumpstart Our Business Startups Act aims to make it easier for new ventures to raise funds from accredited investors via equity crowdfunding. The purpose of this paper is to understand whether Title II equity crowdfunding represents an opportunity for women-owned companies (those that have one or more female owners/founders) to raise capital at rates similar to companies owned by men. Design/methodology/approach The authors conduct an exploratory analysis using a data set containing 6,234 Title II equity crowdfunded offerings aggregated across 17 crowdfunding platforms between September 2013 and December 2015. Findings The authors find that women-owned companies constitute only 15.2 per cent of the ventures seeking funding in this data set; however, gender had no effect on the likelihood of successful fundraising under Title II. Originality/value This study is the first to examine the roll of gender on the success of equity crowdfunding campaigns the USA. It provides empirical evidence that crowdfunding has had limited impact on democratizing access to capital for woman-owned startups and small businesses. The data reveal that woman-owned companies are underrepresented in Title II equity crowdfunding to an even greater extent than they are underrepresented in angel and venture capital (VC) investments. The results of this study also highlight the importance of examining the role of gender in equity crowdfunding across different countries.

https://www.puntoorginternationaljournal.org/index.php/PIJ/article/view/97

“…These results provide support to our first hypothesis (H1 Female-led equity crowdfunding campaigns are more successful than male ones) Our findings are consistent with Horvat and Papamarko (2017) that, analysing four years' worth of data from one of the leading UK equity crowdfunding platforms, show that women entrepreneurs benefit of higher success rates in fund raising. We also confirm the evidence found by Malaga et al (2018), Bapna and Gianco (2019) and McGuire (2020) in the United States context.…”

Gender, Anonymity and Team: What Determines Crowdfunding Success on Kickstarter

“…The effect of gender on the success of crowdfunding campaigns has been previously investigated. Malaga et al (2018) find that gender is not a significant factor in raising funds in equity crowdfunding. However, we find that females are more successful in raising capital in our study.…”

Women on the edge of a breakthrough? A stereotype threat theory of women’s angel investing

“…However, there is no evidence that women angel investors have significantly less experience of management buyouts (MBOs), less board-level experience in larger businesses or have less industry experience. There also appears to be no significant male/female difference in entrepreneurial finance experience, as reflected in experience of crowdfunding (but see Malaga et al, 2018; Mohammadi and Shafi, 2018) and syndication with other investors (Table 1). This suggests that while the growth in the number of women angels is bringing in women with different backgrounds and experience, and is consistent with wider evidence that the UK angel market is changing in terms of motivations and backgrounds (Mason and Botelho, 2014), these differences are for the most part not significant.…”