Study: Women outperform men in seed crowdfunding

A new study finds women are more successful at seed crowdfunding than are men. (miriam-doerr/Getty)

An analysis of over 450,000 seed crowdfunding campaigns from nine of the largest global crowdfunding platforms has determined that female-led campaigns are 32% more successful at reaching their funding targets than are male-led campaigns.

The report, Women unbound: Unleashing female entrepreneurial potential, released jointly on July 11 by London-based accounting and consulting firm PricewaterhouseCoopers (PwC) and The Crowfunding Centre, based in Birmingham, U.K., shows that, while men typically set higher funding targets, women generally receive pledge amounts that are nearly 5% more generous: On average, each individual backer contributes $87 to women and $83 to men.

What exactly is crowdfunding? According to PwC, it is “a disruptive innovation [that] has provided new routes to funding for individuals, startups, and growth businesses. It enables them to engage and interact directly with the market and with thousands of backers, supporters, customers and potential partners like never before.”

And more specifically, seed funding is financing that is raised by startups at a very early stage. Since its inception, seed crowdfunding’s footprint has continued to spread, with the levels of finance raised through the nine platforms analyzed in this report jumping from $10 million in 2009 to over $767 million in 2016, with backers from over 200 countries.

U.S. crowdfunding websites such as Indiegogo and Kickstarter have become popular platforms for entrepreneurs looking to raise money for projects ranging from watches powered by body heat to publishing comic books, Bloomberg recently said.

Overall, in the United States and United Kingdom—the two countries with the largest volumes of such campaigns—20% of male-led campaigns reached their targets, compared with 24% and 26% of female-led campaigns, respectively.

In addition, based on two full years of seed crowdfunding data (2015-2016), even in more male-dominated sectors—such as the technology sector, in which there are nine male-led campaigns to every one female-led campaign—female-led campaigns are more successful, 13% to 10%, respectively.

Indeed, while men clearly use seed crowdfunding more than women, just 17% of male-led campaigns reached their targets, compared with 22% of female-led campaigns. Overall, campaigns led by women were 32% more successful at reaching their funding target than those led by men across a wide range of sectors, geography, and cultures.

This trend continues in countries where seed crowdfunding is not yet as wide-scale or successful. For example, 11% of female-led campaigns in Africa reached their goals compared with 3% of male. And in the Emerging 7 (E7) nations (China, India, Brazil, Mexico, Russia, Indonesia and Turkey), 10% of female-led campaigns reached their goals compared to 4% of male-led campaigns.

Crowdfunding Centre CEO and cofounder Barry James commented, “Who could have expected that when the middlemen are removed from the equation, and women and men entrepreneurs get equal and direct access to the market, it would turn out that women would, immediately and decisively, outperform the men, across the board?"

This report, James said, shines “a new light on the endemic imbalance and the causes that have long fueled limited access to finance for female entrepreneurs via traditional financing routes. That only half as many women currently embark on a crowdfunding campaign is undoubtedly a reflection of low expectations stemming from the same roots.

“So, in that light, it's time to readjust not just our expectation[s] and perceptions but our attitudes, institutions, behaviors—and the way we make decisions."