Why Women Entrepreneurs Are More Successful With Crowdfunding

In the past 10 years, a total of more than 6.7 billion U.S. dollars had been pledged to projects on the Kickstarter crowdfunding platform. Women entrepreneurs have more success with crowdfunding than with traditional funding according to this research.

The researchers found that women entrepreneurs are more likely to see successful outcomes when they conduct an initial fundraising campaign through something like Kickstarter or GoFundMe.

You might ask yourself why this is the case. In this article we unpack the reasons for women entrepreneurs’ success with crowdfunding platforms. 

Women Entrepreneurs Are More Risk-Tolerant

Women are better at taking on fewer risks and finding the right amount of investment to get them started.

In a study of hundreds of entrepreneurs, researchers found that women were more likely to start a business in a market where there was room for growth, but also a set of customers that were not yet existing. This is a good combination for a sustainable business model.

Women entrepreneurs are also more likely to be risk-tolerant because they are less likely to be blinded by their desire for wealth. They’re more likely to see opportunities in the market, and less likely to be blinded by an unrealistic picture of what they think they can get out of business.

Women Entrepreneurs Are More Likely To Build A Relationship With Crowdfunding Donors

Another key difference between how female and male entrepreneurs are most successful with crowdfunding is that women are more likely to use crowdfunding platforms to build a relationship with their donors.

As crowdfunding campaigns go on, the entrepreneurs start communicating with their donors. At some point, they are reaching out to their donors to ask them for support. This is a crucial moment for fundraising.

It’s important to note that crowdfunding is about building and maintaining a relationship.

It’s not a one-sided transaction where one person takes all the risk and the other person returns all the rewards. This transaction happens in two parts: the entrepreneurs are taking the risk of starting the business, and the backers are taking the risk of supporting the business.

Women Entrepreneurs Have Better Networks Through Crowdfunding Platforms

An important finding from the researchers is that women entrepreneurs are more likely to have networks through crowdfunding platforms.

This means that the women are more likely to have the support of their friends, family and social media contacts when they start their business. This is important because crowdfunding can be a lonely experience.

Most crowd-funders don’t have anyone to talk to about their experience other than their online friends who are also supporting the same cause. This makes it more likely that a woman will have the support of these people when they start their project.

It makes it more likely that they will build a relationship with these people over time if the project is successful.

There Are More Female Investors and Advisors on Crowdfunding Platforms

Female crowdfunding participants are more likely to have female investors and advisors on the platform. This means that women have more women to support them on crowdfunding platforms.

It’s not that there aren’t many investors on crowdfunding platforms — it’s that women are more likely to find each other on those platforms.

Conclusion

Women entrepreneurs have a distinct advantage over men when it comes to crowdfunding. Prior research has found that women entrepreneurs are more likely to see successful outcomes when they conduct an initial fundraising campaign through something like Kickstarter or GoFundMe.

The reason women entrepreneurs succeed with crowdfunding is that they are more likely to be risk-tolerant, build a relationship with their donors, have better networks through crowdfunding platforms, and find crowdfunding that is more convenient for them.