Girls crowd it
Female-led crowdfunding campaigns have proven a third more successful in reaching their finance targets than those led by males across a wide range of sectors, geography and cultures, according to an analysis of over 450,000 seed initiatives across the globe conducted by PwC. Also, many female-led projects snag a higher pledge amount – on average, each individual backer contributes $87 to women and $83 to men.
And the findings pose a strong challenge to existing entrepreneurial and business norms by seriously questioning whether there are deep-rooted barriers that are preventing greater access to funding by female entrepreneurs, PwC says.
Unsurprisingly, most decision-makers in the venture capital industry are male – a mere 7% of partners of the top 100 venture firms globally are women. And of 2,300 venture and micro-venture firms, only 8% of partners are female.
“There is definitely bias, we see that all the time,” says Shinjini Kumar, consumer business manager, Citibank India. “It comes from a lack of women in the VC space who can bring behavioural understanding, but it also comes from the idea that women are too conservative to scale up or that they will leave the business – for a VC that is something that plays.”
However, despite their underrepresentation, women are still more successful at crowdfunding than men – and it comes down to storytelling.
“The ground rules are different for seed crowdfunding as compared with traditional marketing and selling, where you are telling the story and building a relationship rather than just appealing to a need. Women tend to be much more relationship-focused so this often comes more naturally than for men.” Says Kay Klug, co-founder, The Crowdfunding Center.
Female crowdfunders also tend to use more emotional and inclusive language in their videos and pitches.
“This language is more appealing both to female and to male backers and positively correlated with fundraising success,” says PwC. “The use of business language, a style more predominately favoured by male crowdfunders in their pitches, has been shown to be negatively correlated with money raised irrespective of what product or service is being pitched.”