The Gender Gap in Crowdfunding

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Women own about 1 in 4 US small businesses. Women have been starting new businesses at double the rate of men recently. There might be a wage gap in the general employment marketplace, but there is also a gender gap in how small businesses get funded today.

Here’s why: Men receive more than 95% of the money that is handed out through small business loans every year. The problem is that when a pitch is made in person, people prefer ideas that are pitched by men even if a woman pitches the exact same idea. If a man is considered attractive, a female entrepreneur with an in-person pitch might as well just leave.

Online, however, the world is a very different place. Backers who focus on the internet for their investments don’t fall for the traditional stereotypes. They look for good old-fashioned qualifications like education and experience. Suddenly gender doesn’t matter and women are killing it.

Women Have a 70% Success Ratio on Kickstarter

On the surface, women are finding a lot more success with their crowdfunding efforts when compared to men. Male-run campaigns have about a 60% chance of success. For women, their campaigns get funded about 70% of the time. That’s good news, right?

Not necessarily. Let’s take a look at some of the facts that make up these statistics.

  • Women generally ask for fewer crowdfunding dollars in their campaigns when compared to men. In some industries, men has for 2x the money.
  • Just 22% of the investment funds that come from men who participate in crowdfunding is directed toward campaigns that are run by women.
  • Women tend to succeed more in niche industries, while men tend to succeed more in all general industries.

What the data shows is this: Women are finding success as entrepreneurs through crowdfunding, but it is mostly because other women are supporting them. This means crowdfunding has created a different gender gap, but one that could change the entire investing world.

Experience and Success Get Cloned Online

Women might be helping other women more than men, but that’s actually not that bad of a thing in a long-term perspective. Of course an ideal scenario would have men and women supporting each other equally.

Look at it this way: If the internet wants experience, women who help other women create a successful crowdfunding campaign are providing the opportunity to get that experience.

It could be said that with every crowdfunding campaign that is successful, women are taking one more step closer toward men in this field. That’s one more step being taken to close the gender gap and that can only be described as a good thing.

We will probably never completely eliminate gender bias. To expect crowdfunding to be a magic pill that will solve the gender gap issues would be an unreasonable expectation. What we can say is that if female entrepreneurs want to test out an idea to secure some funding, then crowdfunding will provide them with a much better chance than a small business loan will.

It Must Start At the Community Level

For the gender gap to be reduced, it takes more than experience and success. It will also require what could only be described as a “marketing effort” to highlight those successes. The stories of women who have taken a risk, started a business, and turned a crowdfunding effort into a profitable job creation machine must be spread far and wide across the internet so that everyone can see it and have the chance to believe it.

There will always be people who will invest with men because that is their preference. What we can say is that crowdfunding is taking the first steps to making those folks a minority instead of a majority in the investment world. The first steps have already been taken. With women supporting other women, they no longer need to get “permission” from men to find themselves in a powerful entrepreneurial position.

Women still have a hard journey ahead of them. They’ll still need to find their audience. They’ll need to prove their experience within their preferred sector. There will be no room for mistakes.

Yet the fact that women can prove themselves today and have a chance is an accomplishment. Evidence off their creativity and innovation might come with fewer resources right now, but the writing is on the wall: the female entrepreneur is taking over. Crowdfunding is going to help her do it.

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Strong proponent of individual liberty and free speech. My goal is to present information that expands our awareness of crucial issues and exposes the manufactured illusion of freedom that we are sold in America. Question everything because nothing is what it seems.