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Is crowdfunding the way to go for female founders?

We talk a lot about how difficult it is for female founders to secure funding for their start-ups, and the academic research explaining why this is the case (see HERE, HERE and HERE for examples).  To counter this gender bias, women are often advised to "tone down their gender," they are told that they have less success in industries typically thought of as male, and they tend to be conservative in their fundraising ask (which is also one of the reasons their businesses are more successful, but I won't get into that here).


So you can imagine my surprise when I stumbled onto this research from Swiss and Finnish (male) economists Wesemen and Wincent that seems to flip the narrative when it comes to raising funds via crowdfunding. It turns out that when women founders participate in crowdfunding campaigns to raise funds for their businesses, they should actually ignore the traditional advice they're given when fundraising.


Wait, what?

Let's break down the surprising findings:


1. Embrace your identity as a female founder

Contrary to the old advice of downplaying your gender, the study found that women who proudly tagged their campaigns as "female founder" raised significantly more money. It turns out that in the crowdfunding world, your gender can be a powerful asset rather than a liability.


2. Speak to your female perspective

Forget about trying to sound "gender-neutral." Using more female-centric language in your campaign actually correlates with better funding outcomes. This suggests that authenticity and connecting with your audience through shared experiences can be a winning strategy.


3. Tone down the promotion talk

Here's a shocker: using less promotional language led to better results for women. While traditional advice often encourages female entrepreneurs to be more assertive, crowdfunding investors seem to respond better to a more measured approach.


4. Venture into male-dominated sectors

Buckle up for this one: the study found that women who started businesses in male-dominated industries actually performed better in crowdfunding. Instead of sticking to traditionally female-oriented sectors, consider how your unique perspective could disrupt a male-dominated field.


5. Dream big with your funding goals

Contrary to the tendency to set modest goals, the research showed that higher funding targets correlated with better outcomes. So don't be afraid to aim high – it could signal the quality and ambition of your project to potential backers.


What does this mean for female tech founders?


These findings highlight how the crowdfunding landscape operates differently from traditional venture capital. The diverse pool of casual investors in crowdfunding platforms appears to be more open to supporting women entrepreneurs, especially when they authentically showcase their identity and perspective.


For investors, this research challenges unconscious biases and suggests that backing female-led ventures in crowdfunding could lead to promising returns.


(A word of caution from the researchers: whilst these strategies showed success on some crowdfunding platforms, they may not translate directly to equity crowdfunding or traditional VC pitches. Always consider the specific context of your funding environment.)


The big takeaway? The crowdfunding arena might just be levelling the playing field for female tech founders. By embracing your identity, speaking authentically, and aiming high, you could tap into a powerful source of support for your venture.


Everything we do at Breakthrough Labs to support female founders is based on research, whether it's academic research like this or our own conversations with female founders.

If you want to be part of a community that is built to support your needs, join us! Applications for the community open again in September.

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