It’s Not Just Physical: Gender and Bias in Equity Crowdfunding.

Abstract

This research considers if equity investors on crowdfunding platforms display the same bias against women as can be seen in venture capital alternatives. In this study we build a conceptual model in which we argue that increasing the number of women in a team is often associated with a decrease in funding success. We test this model using a dataset of 397 campaigns from a leading UK-based equity platform to elaborate further on the issues around gender, and its impact upon entrepreneurial finance in the context of equity crowdfunding. From this research study we conclude that the aggregated gender within the language used in the investors comments has an influence upon the success of the funding obtained from equity investors. We demonstrate that not only does the physical gender of the team, and the gender of the primary signatory, influence the final decision, but also any gendered nuances in the language within the campaign can have a significant impact. The findings of this study therefore have an important role in helping us to understand why the size and frequency of equity crowdfunding achieved by women is lower when compared to the success achieved by men.