A vast branch of the academic research focuses on gender differences in entrepreneurial initiatives and access to finance. Women have been identified as a large untapped pool of entrepreneurial talent. In fact, worldwide, the number of female entrepreneurs is considerably lower than men. Just by looking at the UK, for example, the number of women-owned businesses is only 15%, while 35% is co-owned by men and women. Doing the math, the remaining 50% is owned by men.
Another fact that is largely renowned is that women’s businesses tend to be under-capitalised relative to their male counterparts. This could be explained by the fact that female entrepreneurs are less likely to want to access external finance generally and equity finance in particular and that they may also experience gender-specific obstacles that create a perception that accessing finance is a barrier.
On the other side, women are also underrepresented in the investment world. Only 8% of the US investor population is composed by women. At this point, a question comes naturally: will securities crowdfunding change female entrepreneurship and investing, encouraging the birth of more women-owned businesses and more women-led investments?
Crowdfunding, by nature, is a democratic process. The fact that a female entrepreneur can pitch her business idea, through an online platform, to a crowd of investors and not to only a few business angels may help in diminishing gender related obstacles and eventually reduce the women’s perception that accessing finance is a barrier. Some early statistics on crowdfunding show that 40% of the successful crowdfunding campaigns was conducted by women, which is a rate much higher than it is typically found in venture capital projects or angel financing projects.
Securities crowdfunding could also potentially encourage more women to become investors. Women, in fact, have indicated among the reasons preventing them from becoming angel investors, the lack of time to dedicate to such activity and the lack of access to the right networks where good deals can be found. Crowdfunding can solve both problems. A platform, which can be easily found online and it is open to anyone, carries on a good part of the back office and due diligence processes, limiting the amount of time required on the investor’s side and takes care of selecting worthy projects. The real challenge will become to understand what platforms offers the best deals, but only time will help to understand this.
Considering that it is proven that women invest more in women-led businesses, we can expect that, with the advent of securities crowdfunding, more women will start investing and probably more female entrepreneurs will receive finance for their businesses to grow.
References
Berry, W. (2014). How crowdfunding is getting women into boardrooms. Startups.co.uk
Carter,S., Marlow, S. & Bennet, D. (2012). Gender and entrepreneurship.Pearson.
Women 2.0. (2013). Why equity crowdfunding is good news for women. Forbes.
Women Enterprise task Force (2009). Myths and Realities of Women’s Access to Finance.
Image credit to: Stefano Corso. http://bit.ly/1tjXQZJ
On the other side, women are also underrepresented in the investment world. Only 8% of the US investor population is composed by women. At this point, a question comes naturally: will securities crowdfunding change female entrepreneurship and investing, encouraging the birth of more women-owned businesses and more women-led investments?
Crowdfunding, by nature, is a democratic process. The fact that a female entrepreneur can pitch her business idea, through an online platform, to a crowd of investors and not to only a few business angels may help in diminishing gender related obstacles and eventually reduce the women’s perception that accessing finance is a barrier. Some early statistics on crowdfunding show that 40% of the successful crowdfunding campaigns was conducted by women, which is a rate much higher than it is typically found in venture capital projects or angel financing projects.
Securities crowdfunding could also potentially encourage more women to become investors. Women, in fact, have indicated among the reasons preventing them from becoming angel investors, the lack of time to dedicate to such activity and the lack of access to the right networks where good deals can be found. Crowdfunding can solve both problems. A platform, which can be easily found online and it is open to anyone, carries on a good part of the back office and due diligence processes, limiting the amount of time required on the investor’s side and takes care of selecting worthy projects. The real challenge will become to understand what platforms offers the best deals, but only time will help to understand this.
Considering that it is proven that women invest more in women-led businesses, we can expect that, with the advent of securities crowdfunding, more women will start investing and probably more female entrepreneurs will receive finance for their businesses to grow.
References
Berry, W. (2014). How crowdfunding is getting women into boardrooms. Startups.co.uk
Carter,S., Marlow, S. & Bennet, D. (2012). Gender and entrepreneurship.Pearson.
Women 2.0. (2013). Why equity crowdfunding is good news for women. Forbes.
Women Enterprise task Force (2009). Myths and Realities of Women’s Access to Finance.
Image credit to: Stefano Corso. http://bit.ly/1tjXQZJ
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
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