The worlds of finance, venture capital, and business ownership are dominated by men. It’s a circular problem — men have the money, they give it to other men, and women struggle to get access to the capital they need to launch great ideas.
Crowdfunding has started to change the dynamic by giving women access to funds that aren’t guarded by the traditional gatekeepers of venture capitalists and banks. Women already participate in borrowing and lending here at higher percentages than is seen in other types of investment, and that number is on the rise. At Crowdcube, for example, 14 percent of successful business founders have been women; this year, 21 percent have been women so far.
Says Upper Street CEO Julia Elliott Brown:
Speaking as a female entrepreneur who’s been through the more traditional routes of raising finance, as well as a recent crowdfunding round, it certainly feels significantly less intimidating to create and run your pitch online than having to present at a testosterone fuelled pitching event, or walk into the fancy offices of a venture capital firm for an in-person grilling from the guys in suits. It could just the thing that democratises investment for – and by – women.
There are plenty of factors that keep women out of the investment game, including sexual harassment, bias from those who perceive men as more competent business people, and business environments that tend to value predominately male personality traits over those of women. Crowdfunding helps cut the edge of those deterrents. And women have proven their aptitude for it in rewards based crowdfunding. On Kickstarter, 70 percent of women successfully fund their projects compared to 61 percent of men.
Another advantage is that it may be easier to reach women investors through crowdfunding than other funding sources, and women often make a point to support other women. Crowdfunding relies on making personal connections with investors and selling your story, not just your product — and that’s something many women excel at. Emma Mander recently successfully funded a loan on rebuildingsociety.com to buy a soft play center with her mother.
“It was really personal and we were able to talk in great detail over a period of time about our plans for the business and it meant our passion and experiences were able to come across. This approach meant the lenders were able to understand us as people, the business, plans and our backgrounds in detail, giving them the confidence to lend to us. I don’t think I will ever consider another way of borrowing again, and I am already looking at becoming a lender myself to help others as it helped us.”
Mander worked to assert herself so she would be taken seriously. Ultimately, crowdfunding was her business solution after many banks and brokers wouldn’t take on her loan because she didn’t have enough startup capital. The model isn’t only a gamechanger for women, Mander says: “I think it is more accessible to everybody than traditional funding in today’s market.”
So women entrepreneurs, take note! The crowdfunding world is excited about your ideas, and your gender needn’t be a barrier to getting the funds you need to make them a reality. In fact, it may be just the thing that puts you at the front of the pack.