"Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding"

Abstract

Female founders seek and receive less startup capital than male entrepreneurs. One reason for this disparity is a lack of female representation among funders of startups, and a potential solution is to increase the proportion of women in decision-making roles. Both the problem and the solution implicitly rely on homophily -that women will support other women given a chance. However, a lack of clarity over when and how homophily influences individual choices makes it uncertain when better representation is actually advantageous. Using data from crowdfunding, we empirically examine whether higher proportions of female funders lead to higher success rates in capital-raising for women. We find that women outperform men, and are more likely to succeed at a crowdfunding campaign, all other things being equal. Surprisingly, this effect primarily holds for female founders proposing technological projects, a category that is largely dominated by male founders and funders. This finding stands in stark contrast to expectations concerning homophily. A laboratory experiment helps explain how this pattern might emerge and allows us to theorize about the types of choice homophily driving results. We find that a small proportion of female backers disproportionately support women-led projects in areas where women are historically underrepresented. This suggests an activist variant of choice homophily, and implies that mere representation of female funders without activism may not always be enough to overcome the barriers faced by female founders. Keywords: Sociology, homophily; crowdfunding, maker-movement *Authorship is alphabetical; both authors contributed equally in developing this paper. For useful advice we would like to thank: Matthew Bidwell, Martine Haas, Gavin Kilduff, Nathan Pettit, Lisa Leslie, Cat Turco, Ezra Zuckerman, and seminar participants at MIT, NYU, Stanford GSB, and Wharton. Funding was generously provided by the Kauffman Foundation. All the standard disclaimers apply. 2Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding ABSTRACT Female founders seek and receive less startup capital. One reason for this disparity is a lack of female representation among funders of startups, and a potential solution is to increase the proportion of women in decision-making roles. Both problem and solution presuppose homophily -that women will support other women given a chance. However, a lack of clarity over when and how homophily influences individual choices makes it uncertain when better representation is advantageous. Using data from crowdfunding, we empirically examine whether higher proportions of female funders lead to higher success rates in capital-raising for women. We find that women outperform men. Surprisingly, this effect primarily holds for female founders proposing technological projects, a category that is largely dominated by male founders and funders. This finding stands in stark contrast to expectations concerning homophily. A laboratory experiment helps explain how this pat...

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