Women account for less than 8% of chief executives at
venture-backed firms, occupy just 17% of board seats at Fortune 500 companies
and own a mere 30% of all companies. But early data suggest they are
outperforming men in another arena: raising money online via crowdfunding.
On Kickstarter, where backers make contributions in exchange
for rewards, women-led companies account for less than 10% of technology
projects. But roughly two-thirds of women-led technology ventures reached their
fundraising goals versus just 30% of technology ventures with male founders.
Overall, women are 13% more likely than men to meet their
Kickstarter goals, even after controlling for project type, amount being raised
and other factors which examined 1,250 projects in five categories that sought
at least $5,000 between 2010 and 2012.
How female entrepreneurs fare on crowdfunding sites
such as Kickstarter is notable because women tend to launch businesses with
less financing than men and have more difficulty raising funding, making it
tougher for their firms to grow. Overall, men start companies with nearly twice
as much capital as women. Just one in eight companies that raised venture
financing in the first half of 2014 has a female founder or co-founder,
according to Dow Jones VentureSource; 7.6% have a female CEO.
Crowdfunding proponents say their sites democratize access
to capital. Women are 61% more likely than men to meet their financial targets
on its site and account for 41% of small business, technology and other
entrepreneurial campaigns that meet their funding goals.
Crowdfunding isn't comparable to venture-capital financing
or bank lending, partly because backers receive a T-shirt or other reward, not
a company stake or loan payment. Successful technology campaigns raise $90,000
on average while venture-backed U.S. companies typically secure $600,000 to $3
million in their earliest funding round, according to Dow Jones VentureSource.
Still, crowdfunding can provide entrepreneurs with needed
financing, marketing and early indications of customer demand. Ninety-percent
of successful Kickstarter projects in design, technology and videogames
remained ongoing ventures at least 18 months later; nearly one-third reported
annual revenue of at least $100,000.
There are signs that women's crowdfunding successes could be
mirrored on online investing platforms. Women run nearly two-thirds of
companies that have successfully raised funds on CircleUp, an online platform
connecting consumer and retail startups with wealthy individuals known as
accredited investors.
Women-led startups have a 70% success rate versus 58% for men
and receive more page views and more investors, even though there is no
difference in revenue size, profitability and other measures of quality.
Click
here to access the full article on The Wall Street Journal.