It may be difficult for women to enter the world of business, a world in which male entrepreneurs often have easier access to traditional funding sources. Several studies have demonstrated it. However, crowdfunding seems to be changing that completely. At least, that is what emerges from the Women unbound: Unleashing female entrepreneurial potential global report by PricewaterhouseCoopers (PwC). The report’s main findings are presented below
“Women are better at crowdfunding than men.” That is how the Women unbound report begins. The report was produced by PwC in collaboration with The Crowdfunding Center research firm.
Indeed, the study, which analyzed 450,000 crowdfunding campaigns conducted throughout the world in 2015 and 2016, demonstrates that women are 32% more successful than men when it comes to organizing a campaign. Interestingly, the gap is observed everywhere on the planet and in all sectors of activity, including male-dominated ones such as technology. In Canada, women achieve a rate of success of 20% compared to 17% for men.
This statistic is in stark contrast with observations regarding traditional funding. For example, in the United Kingdom, male entrepreneurs are 86% more likely than their female counterparts to obtain venture capital financing and 59% more likely to obtain funding from angel investors.
What explains this dichotomy? “Crowdfunding is subject to rules that differ from those that apply to the traditional sales and marketing sectors. A story needs to be told and a relationship must be built. Simply meeting a need does not cut it. Seeing as women tend to be better than men when it comes to relationships, it’s something that comes to them more naturally than men,” claims Kay Klug, cofounder of The Crowdfunding Center.
Traditional funding is also dominated by men, who make up 93% of the partners of the 100 largest venture capital firms in the world. In a crowdfunding scenario, it is the general population that is solicited.
Women raise more money on average from each and every donor (but not everywhere)
In 2015 and 2016, on a global scale, the average amount donated to a crowdfunding campaign led by a woman was US$87 versus US$83 in the case of a campaign led by a man.
However, these figures are strongly influenced by American and British data. In Italy (US$133 vs. US$98), Asia (US$105 vs. US$80) and Australia (US$116 vs. US$75), the trend is completely opposite. The same applies to Canada, where men collect an average of US$82.95 per donation compared to US$66.98 for women.
The amounts donated and the gap between men and women also vary substantially with respect to the field in which a campaign is led. For example, women raise a lot more money than men for educational projects (US$188 vs. US$72), but do much worse when it comes to business projects (US$92 vs. US$118).
The largest campaigns have been organized by men
Even though women raise more money per donor on average than men in crowdfunding campaigns, male entrepreneurs are generally at the head of the largest campaigns.
Of all the campaigns having raised over US$1 million in the world in 2015 and 2016, only 11% were led by women. In the list of the most lucrative campaigns, the first one led by a woman ranks only 18th.
However, the gap between men and women recedes when it comes to more modest campaigns.
The authors of the Women unbound report nevertheless observe a certain level of progress: after all, in 2014, a mere 7% of all campaigns having raised over US$1 million were led by women.
Men organize a greater number of campaigns
Unfortunately, women also lag behind when it comes to the total sums raised. On a global scale, in 2015 and 2016, women collected a total of US$196 million through crowdfunding, compared to US$654 million in the case of men. The reason for this is simple: there are twice as many men than there are women who launch crowdfunding campaigns.
The same applies to Canada, where 3,109 campaigns were launched by women (for a total of US$6.9 million) compared to 7,157 by men (for a total of US$28 million).
Obviously, the gap is attributable to the fact that there are generally more men than women in business. In Canada in 2011, only 15.5% of SMEs were majority owned by women according to Statistics Canada.
In short, parity is still far from becoming a reality but crowdfunding nevertheless shows encouraging signs for women. To quote PwC’s report: “Thanks to crowdfunding, female entrepreneurs can now access the market directly – and this makes a huge difference.”