Gender differences in the contribution patterns of equity-crowdfunding investors

Abstract

This paper is an exploratory attempt to understand gender-related differences in the behavior of investors in firms seeking equity financing. Using data from the Swedish equity crowdfunding platform FundedByMe, we find that female investors are less likely to invest in the equity of firms that are younger and high tech and have a higher percentage of equity offerings. This pattern seems consistent with a greater risk aversion in female versus male investors. Furthermore, female investors are more likely to invest in projects in which the proportion of male investors is higher.

Crowdfunding: an introduction

“…Vismara et al (2017) report that females are more likely to invest in female-led ventures. However, this is not supported by other studies: for example, Mohammadi and Shafi (2017) find that women are more likely to invest in male-led businesses. In terms of demographics, UK evidence indicates that over-55-year-olds dominate all categories of crowdfunding platforms except equity, and their share is increasing, except on equity platforms (CAF, 2017).…”

New players in entrepreneurial finance and why they are there

“…Out-crowd investors do not seem to attach more importance to information about the project itself than in-crowd investors. Mohammadi and Shafi (2017) introduce the gender issue in entrepreneurial finance. They investigate whether there are gender-related differences in the behavior of crowdfunding investors in Sweden.…”

The evolution and adoption of equity crowdfunding: entrepreneur and investor entry into a new market

“…Social networks allow new markets to emerge, because they drastically reduce the transactions costs of market engagement (Estrin and Khavul 2016a). There is a rapidly burgeoning literature about ECG, focused on social networks (Vismara 2016); pricing and regulation (Hornuf and Schwienbacher 2016;Hornuf and Neuenkirch 2017) and distance effects (Guenther et al 2017;Mohammadi and Shafi 2017).…”