She's Back(ed) in Business: A Study About Gender Differences in Crowdfunding Outcomes

Abstract: Lack of accessible financing has been a main challenge faced by entrepreneurs worldwide, which particularly has inferred barriers for female entrepreneurs in their pursuit for pre-seed capital. In recent years, a disruptive and rapidly growing funding method for start-ups using the Internet to gather a crowd of amateur investors has developed - Crowdfunding. This paper finds evidence of gender differences in reward-based crowdfunding by analysing a sample of Kickstarter projects launched by entrepreneurs in the Nordics. The empirical results show an average funding advantage for women regarding both average pledged funds and the ability of reaching the project goal, while men set higher goals on average and experience a higher frequency of zero pledged funds. Among the projects that have reached at least the funding goal, men tend to be more successful in raising capital. Further, men obtain a larger share of total funds, as a consequence of their higher presence on crowdfunding platforms. With gender playing a significant role in explaining differences in crowdfunding outcomes, this paper suggests that these differences might be derived to gender stereotypes and behaviours, such as male overconfidence and female risk aversion.