Gender Differences in Equity Crowdfunding

Online peer-to-peer investment platforms are increasingly popular venues for entrepreneurs and investors to engage in financial transactions without the involvement of banks and loan managers. Despite their purported transparency and lack of bias, it is unclear whether social inequalities present in traditional capital markets transfer to these platforms as well, impeding their hoped revolutionary potential. In this paper we analyze nearly four years' worth of data from one of the leading UK-based equity crowdfunding platforms. Specifically, we investigate gender-related differences in patterns of entrepreneurship, investment, and success. In agreement with offline trends, men have more activity on the platform. Yet, women entrepreneurs benefit of higher success rates in fund-raising, a finding that mimics trends seen on some rewards-based crowdfunding platforms. Surprisingly, we also find that female investors tend to choose campaigns that have lower success rates. Our findings contribute to a better understanding of gender-related discrepancies in success on the online capital market and point to differences in activity that are key factors in the apparent patterns of gender inequality

Tackling gender bias in equity crowdfunding: an exploratory study of investment behaviour of Latin American investors

Purpose Belonging to the financial technologies' companies, equity-based crowdfunding platforms offer investors the opportunity to become shareholders through the purchase of small equity stakes of new innovative ventures. This paper aims to investigate gender-related differences in the behaviour of investors in firms seeking equity financing in Latin America. Design/methodology/approach Using a unique database, with combined information from different equity crowdfunding platforms in Brazil, Chile and Mexico, the authors study the population of 492 projects between 2013 and 2017. To analyse the relationship between investors' gender-related differences and equity crowdfunding investment, this paper applies Poisson regression. Findings Results suggest that the probability that an investor finances a firm is based on gender bias. Investors prefer firms led by entrepreneurs that are similar to them in terms of gender. Furthermore, the authors find evidence that both female and male investors are risk-averse and are more likely to invest in the equity of firms that are older and offer a higher percentage of equity. However, female investors are associated with firms that are on average older and offer 0.02% more equity. Practical implications These findings have implications for crowdfunding platforms managers when selecting their target companies and policymakers when defining political actions to promote greater use of equity crowdfunding among female entrepreneurs and decrease barriers hindering women's access to investment. Originality/value Unique in its proposition and data usage, this study sheds light on the relationship between investors and entrepreneurs in the Latin American equity crowdfunding market

In crowdfunding we trust : a trust-building model in lending crowdfunding

Trust critically affects the perceived probability of receiving expected returns on investment. Crowdfunding differs in many ways from traditional forms of investing. We have to ask what builds trust in this particular context. Based on literature regarding the formation of initial trust, we developed a model to explain which factors lead to crowdfunders’ trust in a crowdfunding project. We tested it on data collected from actual investors in a real project on a crowdlending platform. Our results show that trust in the crowdfunding platform and the information quality are more important factors of project trust than trust in the creator

Success Factors in Peer-to-Business (P2B) Crowdlending: A Predictive Approach

Peer-to-Business (P2B) crowdlending is gaining importance among companies seeking funding. However, not all projects get the same take-up by the crowd. Thus, this study aims to determine the key factors that drive non-professional investors to choose a given loan in an online environment. To this purpose, we have analyzed 243 crowdlending campaigns on October.eu platform. We have obtained a series of variables from the analyzed loans using logistic regression. Results indicate that loan amount, loan term and overall credit rating are the key predictors of non-professional lender P2B crowdlending success. These findings may be useful for predicting whether the crowd will subscribe to a loan request or not. This information would help businesses to modify specific loan characteristics (if possible) to make their loans more attractive or could even lead companies to consider a different financial option. It could also help platforms select and adapt project parameters to secure their success

How gender influences the probability of success in crowdfunding

Female entrepreneurs have higher barriers of entry when compared to their male cohorts. Female discrimination is present when trying to gain access to finance in the traditional investment industry. In recent years, crowdfunding has emerged as a viable method of early venture financing. This paper investigates the correlation between female entrepreneurs and the likelihood of accessing finance on crowdfunding compared to males. The evidence shows that campaigns led by female entrepreneurs benefit from higher rates of success compared to their male counterparts. Furthermore, when investigating whether females, compared to males, experience a larger negative effect as goals increase in relation to success, results found that there is no difference between females and males. And finally, when analyzing whether female success rate in male dominated categories is lower compared to males, we see that females benefit from higher rates of success, compared to males. Female participation on the crowdfunding platform as is less than males, however, they succeed at higher rates than men, even in typically male dominated industries, illustrating that crowdfunding can help take steps towards breaking the cycle of female discrimination when investing.As mulheres empresárias têm mais barreiras de entrada quando comparadas aos seus coortes masculinos. A discriminação feminina está presente quando tentam obter acesso a financiamento, num setor de investimentos tradicional. Nos últimos anos, o crowdfunding surgiu como um método viável de financiamento de risco inicial. Este trabalho investiga a correlação entre mulheres empresárias e a probablilidade de aceder a um financiamento especialmente devido ao crowdfunding. Em relação às taxas de sucesso feminino, os dados demonstram que campanhas lideradas por mulheres têm maiores taxas de sucesso em relação aos seus homólogos masculinos. Além disso, ao investigar se as mulheres sentem um efeito negativo maior à medida que os objetivos para alcançar o sucesso aumentam, em comparação com os homens, os resutados indicam que não há diferença entre homens e mulheres. E, finalmente, ao analisar se a taxa de sucesso femino em categorias dominadas pelos homens é menor, verificamos que as mulheres beneficiam de maiores taxas de sucesso comparadas com os homens. Embora a taxa de participação feminina como líderes seja menor que a dos homens na plataforma de campanha crowdfunding, elas conseguem taxas mais elevadas de sucesso do que os homens, ilustrando que o crowdfunding pode ajudar a tomar medidas para quebrar o ciclo de discriminação feminina no que toca ao investimento

She Matters: 2015 Issues and Actions

She Matters: 2015 Issues and Actions contains recommendations and strategies for all of us as we work to ensure equity, education, safety, security, and opportunity for females across the state. We hope this report serves as a valuable tool for development of initiatives and policies for key stakeholders and decision-makers

Does equity crowdfunding democratize entrepreneurial finance?

This paper investigates whether gender, age, ethnicity, and geography affect the choice of equity crowdfunding offerings vs initial public offerings (IPO) on traditional stock markets and whether these characteristics increase the likelihood of a successful offering. Using 167 equity offerings in Crowdcube and 99 equity offerings on London’s Alternative Investment Market raising between £300,000 and £5 m, we find that companies with younger top management team (TMT) members are both more likely to launch equity crowdfunding offerings than IPOs and have higher chances to successfully complete an equity crowdfunding offering. Remotely located companies are more likely to launch equity crowdfunding offerings than IPOs and have higher chances to successfully complete an equity crowdfunding offering. On the contrary, female entrepreneurs do not have higher chances to raise funds in equity crowdfunding. Minority entrepreneurs do not have higher chances of successfully raising capital but do attract a higher number of investors. Overall, our evidence provides empirical guidance for the first time to the oft-repeated policy claim that equity crowdfunding democratizes entrepreneurial finance by providing access to funding to underrepresented groups of potential entrepreneurs

Birds of a Feather Flock Together: The Inclusive Effect of Similarity Patterns in Equity Crowdfunding

Crowdfunding is helping to drive financial inclusion by expanding the availability of funds to traditionally excluded and underserved groups of individuals, such as ethnic minority and female entrepreneurs. This study verifies how ethnic and gender similarity between investor and entrepreneur can affect the invested amount in an equity crowdfunding campaign. Using an integrated approach with linear regression and Shapley decomposition, we analyze 8600 investments made by 5996 unique personal shareholder investors in 81 equity crowdfunding campaigns. Results show that similarity patterns seem to significantly influence the amount invested in a campaign but their effects change according to investor’s gender and ethnic origin. In fact, even if female investors give a higher amount to men-led companies, their preference changes if the company is run by a female founder belonging to the same ethnic minority group. Results emphasize equity crowdfunding’s potential as a tool for the financial inclusion of ethnic minority groups of investors and entrepreneurs

Crowdfunding for entrepreneurship: an exploratory multivariate analysis concerning kickstarter and indiegogo platforms

Mestrado APNORThe general purpose of this work is to describe and analyse the financing phenomenon of crowdfunding and to investigate the relations among crowdfunders, project creators and crowdfunding websites. More specifically, it also intends to describe the profile differences between major crowdfunding platforms, such as Kickstarter and Indiegogo. The findings are supported by literature, gathered from different scientific research papers. In the empirical part, data about Kickstarter and Indiegogo was collected from their websites and also complemented with further data from other statistical websites. For finding out specific information, such as satisfaction of entrepreneurs from both platforms, a satisfaction survey was applied among 200 entrepreneurs from different countries. To identify the profile of users of the Kickstarter and of the Indiegogo platforms, a multivariate analysis was performed, using a Hierarchical Clusters Analysis for each platform under study. Descriptive analysis was used for exploring information about popularity of platforms, average cost and the most popular area of projects, profile of users and future opportunities of platforms. To assess differences between groups, association between variables, and answering to the research hypothesis, an inferential analysis it was applied. The results showed that the Kickstarter and Indiegogo are one of the most popular crowdfunding platforms. Both of them have thousands of users and they are generally satisfied. Each of them uses individual approach for crowdfunders. Despite this, they both could benefit from further improving their services. Furthermore, according the results it was possible to observe that there is a direct and positive relationship between the money needed for the projects and the money collected from the investors for the projects, per platform.O objetivo principal do trabalho descrito neste documento é descrever e analisar o fenómeno de crowdfunding e investigar as relações entre os financiadores, criadores de projetos e as plataformas de crowdfunding. Mais especificamente, pretende-se descrever a diferença de perfil das plataformas principais, como a Kickstarter e Indiegogo. O estudo é suportado em literatura científica, recolhida por intermédio de bases de dados e indexadores de artigos científicos. Na parte empírica, os dados relativos às plataformas Kickstarter e Indiegogo foram recolhidos dos sítios web correspondentes e complementados com informação de outras fontes online. Informação mais específica, relativa à satisfação dos empreendedores em ambas as plataformas, foi obtida por intermédio de um questionário, aplicado a 200 utilizadores de diferentes países. Para identificar o perfil dos utilizadores das plataformas Kickstarter e Indiegogo foi desenvolvida uma análise multivariável, especificamente a Análise de Clusters Hierárquicos. Estatística descritiva foi também gerada para explorar a informação sobre a popularidade das plataformas, o custo médio, as áreas de projeto mais populares, o perfil dos utilizadores e oportunidades futuras das plataformas. Para avaliar as diferenças entre grupos, as associações entre variáveis e dar resposta às hipóteses de investigação, foi aplicada uma análise inferencial. Os resultados demonstram que Kickstarter e Indiegogo são das plataformas de crowdfunding mais populares. Ambas têm milhares de utilizadores, que se encontram geralmente satisfeitos. Cada um dos projetos segue uma perspetiva individual de financiamento. Apesar disto, ambas as plataformas podem beneficiar de algumas melhorias nos seus serviços. Adicionalmente, de acordo com os resultados, foi possível observar que há uma relação direta e positiva entre o montante necessário para os projetos e o montante recolhido dos investidores de cada projeto, para cada plataforma.Ուսումնասիրության հիմնական նպատակը քրաուդֆանդինգի ֆինանսական ֆենոմենի նկարագրումը, բացահայտումն ու վերլուծումն է, ինչպես նաև քրաունդֆանդինգ իրականացնողների, ծրագրերի հեղինակների և քրաուդֆանդինգային կայքերի միջև կապի բացահայտումը։ Ոսումնասիրությունը նպատակ ունի նաև ներկայացնել պրոֆիլային տարբերությունները ամենախոշոր երկու քրաուդֆանդինգ պլատֆորմների միջև, ինչպիսիք են Կիքստարտերը և Ինդիգոգոն։ Ամբողջ աշխատանքն իրականացվել է օգտագործելով զանազան գիտական գրքեր և հոդվածներ։ Հաշվարկային մասում օգտագործվել են նաև տվյալներ՝ վերցված Կիքստարտերի և Ինդիգոգոի ինտերնետային կայքերից, ինչպես նաև այլ տարբեր վիճակագրական կայքերից։ Ավելի մանրամասն տեղեկատվություն վեր հանելու համար, ինչպես օրինակ ձեռներեցների բավարարվածության մակարդակը երկու քրաուդֆանդինգ պլատֆորմների համար, ուղղարկվել են երկու հարյուր հարցաթերթիկներ տարբեր ձեռներեցների զանազան երկրներից։ Ողջ տվյալները վերլուծվել են՝ օգտագործելով մի շարք վիճակագրական և վերլուծական գործիքներ։ Արդյունքները ցույց են տալիս, որ Կիքստարտերը և Ինդիգոգոն աշխարհում ամենահայտնի քրաուդֆանդինգային պլատֆորմներն են։ Երկուսն էլ ունեն հազարավոր օգտատերեր, որոնք ընդհանուր առմամբ բավարաված են մատուցված ծառայություններից։ Երկու պլատֆորմներն էլ ցուցաբերում են անհատական մոտեցում իրենց քրաունդֆանդերների համար։ Չնայած դրան, երկուսն էլ կարիք ունեն բարելավելու ծառայությունների որակը, որը նրանց ուժերի սահմաններում է։ Վերջնական արդյունքներից ելնելով՝ հնարավոր է դիտարկել, որ գոյություն ունի ուղղակի և դրական կապ ծրագրերն իրենց ավարտին հասցնելու համար անհրաժեշտ գումարների և ներդրողների կողմից տրամադրվող ֆինանսական միջոցների միջև։El principal objetivo del presente trabajo de investigación es describir y analizar el fenómeno de la financiación crowdfunding y averiguar las relaciones entre los crowdfunders, creadores de proyectos y las plataformas de crowdfunding. Más específicamente, se pretende describir las diferencias de perfil entre las principales plataformas, como Kickstarter e Indiegogo. Todo el estudio está apoyado en la literatura científica que existe sobre la tematica. En la parte empírica, se recogieron datos sobre las plataformas Kickstarter e Indiegogo en sus sitios web y también se complementó la información con otras fuentes online. Para encontrar información específica, como la satisfacción de los empresarios de ambas plataformas, se aplicó una encuesta de satisfacción a 200 empresarios de diferentes países. Para identificar el perfil de los usuarios de las plataformas Kickstarter e Indiegogo, se realizó un análisis multivariado, a saber un Análisis Jerárquico de Clúster para cada plataforma en estudio. Se efectuó un análisis descriptivo exploratorio para intentar conocer la popularidad de las plataformas, el coste medio y el área más popular de los proyectos, el perfil de los usuarios y las oportunidades futuras de plataformas. Para evaluar las diferencias entre los grupos, asociación entre variables, y que respondan a las hipótesis de investigación, se aplicó un análisis inferencial. Los resultados mostraron que las Kickstarter e Indiegogo son de las plataformas de crowdfunding más populares. Ambas tienen miles de usuarios y están en general satisfechos. Cada uno de los proyectos sigue un enfoque individual de financiación. Aunque, ambas las plataformas podrían beneficiarse de la mejora en sus servicios. Además, según los resultados fue posible observar que existe una relación directa y positiva entre el dinero necesario para los proyectos y el dinero recogido de los inversores para los proyectos

Essays on Gender in Crowdfunding

Papers I - IIlI are excluded from the dissertation until they will be published.publishedVersio