Why Women Entrepreneurs Have Greater Success With Crowdfunding
One very big hurdle faced by woman entrepreneurs with ideas, is accessing adequate start-up capital. Women face too many disadvantages from the industry of venture capital, mainly as the ecosystem remains skewed towards favoring men because of the solid existence of men’s clubs and power groups. For women qualified in technology, the challenge is evident in the everyday and regular workplaces. A survey by Elephant in the Valley conducted with 200 women, who had a minimum of 10 years’ worth of professional experience in technology, reported 67% feeling left out and shunned from networking or social opportunities due to their gender, rendering a majority of the work culture and environment, hostile towards its women workforce.
Surprisingly, women found crowdsourcing as a promising and refreshing avenue of expanding their narratives while pitching ideas, which may go beyond the immediate work network. Crowdsourcing enables considerable traction, delivering an important platform for women empowerment by preventing indecent harassment and promoting projects, which preserve culture. Crowdsourcing thus emerges as a platform that is women-friendly. The National Women’s Business Council has released a paper on how women entrepreneurs can use crowdfunding as a source of capital, based on original and exclusive data made available by two of the biggest crowdsourcing platforms, Kiva and Kickstarter. The aim was to assess various success predictors on crowdsourcing websites/platforms for business owners who were women and study if success predictors differed from that of their male contemporaries.
Social Network Platforms and Unequal Effectiveness
A woman’s unique network could possibly play a positive and important role by offering avenues and means to meet unmet capital need on Kiva or Kickstarter, although these may be differences. For the website Kiva, a social network solely for women experiences a greater predictor of success while it offers very little margin for women. Through the study, it was found that there was only a 0.2% increase in chances of succeeding even if there was a 10% hike in the number of ‘likes’ on Facebook.
On the Kickstarter, social networks ensured substantial impact, irrespective of gender. The study showed that a 10% increase in number of shares on Facebook enhanced increase in success rates by 7.8%. Further, the median campaign with a good video presentation enhanced success rates by 12% and generally, campaigns, which offered limited rewards increased their success rates by 3% as compared to campaigns which did not offer any rewards. An impressive head start with promotional activities ensured increased success rates for the women while including video pitches and rewards for capital, contributed to better success. As women’s business networks limited their capital access capabilities, social media networking could play a massive corrective role.
Realistic Goals Contribute to Success
Kickstarter is based on rewards, AON (which stands for all or nothing) platform with backers receiving rewards linked to the duration and size of contributions enabling creative ideas and startups to thrive with this platform. But the principle campaigner does not get to see any money unless fund targets are met. Kiva uses a peer-to-peer credit lending model, but as Kiva is registered as a non-profit organization, the lenders can access their contributed pool, without any interest. Kiva is also based on the AON principle with a relatively higher rate of attaining success for those businesses, which are already well established.
The emphasis is on the fact that individuals should have realistic goals in these AON platforms which should necessarily coincide with their network. For an individual with a relatively small network, any goal exceeding $6,000 may be unrealistic. For pursuing a goal of more than $6,000, prior to the campaign launch, they must build up and expand the size of their social network and continue leveraging through those networks as long as the campaign is live. The average goal regarding capital funding on Kickstarter is about $20,000 which is achievable due to the higher requirement of funds for innovative ideas and start ups. The average capital goal on Kiva was around $5,000, as most funding requests were put forth by established businesses.
Don’t Set Very Low Goals
Both platforms witnessed lower capital funding goals from women entrepreneurs than it did from male business owners/representatives. On Kickstarter, the average funding goal for women was only $14,552 for every campaign, while for men, the funding target averaged $20,282. Possibly this difference indicates the aversion to risky financial decisions by women entrepreneurs. The funding gender disparity is further heightened when the premiums (any amount exceeding the target amount) are also accounted for. On Kickstarter, the average premium which were raised by men almost exceeded twice those raised by the women (65% vs. 132%). This has an impactful negative effect on a business’ capital needs, as women tend to set lower targets right on the onset.
Leveraging Personal Stories on these Crowdsourcing Platforms
The study reviewed video campaigns in terms of their, length and presence or absence of it and it’s textual pitch. Results indicated that personal stories remain an effective help in meeting crowdfunding goals. Adding rewards for lending, in addition to a video pitch, contributed to greater success on Kickstarter. Women focused on detailed personal narratives on the Kiva platform to build a strong network for leverage, due to the platform’s philanthropic nature.
More in Crowd Funding
City Wars! Which Popular City is the Best to Own a Million Dollar Home in?
When buying real estate, any home buyer would want the largest square footage for their buck. So what sorts of an...July 6, 2022
The Ultra Wealthy Want Their Privacy and They’ll Do Anything to Get It
Ultra-rich rapper Nicki Minaj in her pink Lamborghini worth $400,000 or celebrity entrepreneur Mark Cuban stepping out from his private jet worth $40...July 1, 2022
Equity Crowdfunding Demystified – Part I
As a small business owner, securing funds for your start-up is challenging. Less than 1% of start-ups secure funds from angel...June 30, 2022
This is The Situation of American Indebtedness at Every Age
It is said that once born as a human being, you can never escape Debt and Death. How true when at...June 29, 2022
Celebrities Who Take the Term ‘Neat Freak’ to a Whole New Level
When obsessive and/or compulsive preferences are disturbed, it might annoy the individual, but not actually cause any unyielding or extreme anxiety, as is...June 28, 2022
What’s a Crypto Wallet and Do You Need It?
Technically, you don’t keep coins in cold storage or download hot wallet programs to your desktop. Many crypto-exchanges now allow storing...June 27, 2022
Hollywood’s Plastic Surgeons Admit Business Boomed During Lockdowns
Nobody knows they had it done Celebrities got liposuction, nose jobs, and invasive procedures done, when the lockdown cancelled performances. Invasive...June 24, 2022
Getting Yourself a Mortgage is Easy with These 8 Steps
A red-hot housing market and rising mortgage rates complicates home-purchase processes; be prepared and study the mortgage process before home shopping....June 23, 2022
Some Wildly Successful Crowdfunded Start-ups that Had Us Surprised
A successful crowdfunding campaign can take your business to reach the next level and some start-ups whose crowdfunding campaigns managed to...June 20, 2022