Can Women in Startups Beat the Funding Gender Bias with Crowdfunding?

Here's how businesses raise funds with crowd investing.

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According to the National Association of Women Business Owners, 9.1 million women-owned businesses in the United States have now employed more than 7.9 million people with revenues totaling $1.4 trillion.

This information shows that the number of female founders engaging in business startups is steadily increasing over the years. Statistics show an 18 percent increase in 2018 compared to 2017.

Top in the list of the reasons why women are seeking to be entrepreneurs is the need to follow their passion and the dissatisfaction with the corporate space in the country. The survey also indicated that women become dissatisfied quickly while climbing the corporate ladder.

The Challenge
The challenge that most women have faced is a lack of support regarding business financing. Sourcing capital has been a barrier for female founders, and national statistics show that business-loan approval rates for women are 15 to 20 percent lower compared to their male counterparts.

The Solution
Crowd investing is bridging the gender-bias gap in funding.
Crowdfunding has changed the system of access to capital by leveling the playing field for men and women. When investors choose which business to support democratically, entrepreneurs have direct admission to a vast pool of funds. More women are also investing in funding for women-led businesses as a way of supporting each other and increasing the investments.

Here’s how businesses raise funds with crowd investing:

Equity Crowdfunding: Here the people in the crowd invest in new startups that have not yet joined the stock market in exchange for shares in the company. Shareholding gives the people part of ownership to the company and a chance to earn profits if the company performs well.

Debt Crowdfunding: In this form of financing, the investors advance their investments to the business through various channels such as bonds, peer-to-peer lending or invoices. This direct investment has helped reduce the middlemen that were involved in the system, which ended up increasing the interest rates to make profits.

Why do women entrepreneurs have the edge in crowdfunding?

Motivation: All businesses have the intention to make a profit. However, when you look at many women’s motivations in their business structure, you will realize that they have more focus on impacting society and bringing greater change.

Emotional Intelligence: Women are usually in tune with their feelings, which can help business relations. These emotional-intelligence factors like empathy, honesty and communicating clearly give them greater appeal on crowdfunding platforms. Every customer needs to feel the company cares about them, and women know how to do this by showing greater concern for individuals.

Look at how these women have made a killing in crowdfunding:

According to an article by the New York Post, women regularly outperform men in the crowdfunding sphere. The top example they discuss is the popular children’s book from Timbuktu Labs about rebel girls. It’s “the fastest-funded publishing project in Kickstarter history.” In only three hours of their launch, they got more than $100,000.

Forbes also reported how the female-driven company JIBO raised capital for the “world’s first social robot” you can use at home. They got $3.7 million through crowdfunding. That’s 2,288 percent more than their original goal!

Also making Kickstarter history, described how the women behind the official Fidget Cube got $6,465,690 through crowdfunding. Their desktop devices to help people focus at work got 155,000 backers! That’s how the Antsy Labs project became an incredible success.

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