Are you a woman entrepreneur looking for financing to start or grow a business? Before you try to get a bank loan, approach angel investors or seek out venture capital, maybe you should try going on Kickstarter to raise money. According to a recent study, Gender Dynamics in Crowdfunding: (Kickstarter), the popular peer-to-peer crowdfunding site is one arena where women business owners actually stand a better chance than men of getting financing.
While female entrepreneurs only get a measly 6 percent of VC and 19 percent of angel investments, the study reports that on Kickstarter, women are about 8 percentage points more likely than men to get financing.
Although women on Kickstarter typically ask for less money than men do, that wasn’t why they got more funding. The study compared male- and female-led projects seeking the same amounts, and discovered that women were still more likely to get financing. Overall, 69.5 percent of women on Kickstarter succeeded at funding their projects, compared to 61.4 percent of men.
What’s behind women’s higher success rate? One simple explanation is that there are proportionately more women investors on Kickstarter than there are women angel investors or venture capitalists. Just 10 percent of VCs and 22 percent of angel investors are women, the study found. By comparison, some 44 percent of investors on Kickstarter are women.
Simply put, women tend to invest in other women, and men tend to invest in other men. Some 40 percent of women’s Kickstarter investments funded women-led businesses or projects; just 23 percent of men’s Kickstarter investments did.
Want to really increase your chances of getting KIckstarter financing from other women? Add more women to your founding team (or at least, don’t add any men). Founding teams made up of all women were more likely to get investments from women; mixed-gender teams got less; and all-male teams got the least money from women investors.
Both women entrepreneurs and women investors on Kickstarter tend to gravitate toward projects related to food, while male entrepreneurs and investors were more likely to gravitate toward comics, product design, games and technology. However, that doesn’t mean you need to be in a traditionally “female-oriented” industry to succeed on Kickstarter. Women entrepreneurs involved in comics, music and technology were actually more likely to raise money on Kickstarter than men, even though they asked for more money to begin with.
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Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at email@example.com, follow her on Google+ and Twitter.com/Rieva, and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.