In crowdfunding, women have a notable advantage
Research shows females are at a disadvantage in securing bank loans, venture capital funding, and other sources of money needed to grow a business. But they have a notable edge in crowdfunding.
According to Asst. Prof. Andreea Gorbatai, “women are better at telling a story that resonates with potential crowdfunding investors.” In her paper, “The Narrative Advantage: Gender and the Language of Crowdfunding,” authored with Laura Nelson of the Kellogg School of Management, Gorbatai notes that crowdfunding pitches rely heavily on the written word—unlike, say, venture capital pitches that tend to be face-to-face and more likely to disadvantage women due to societal stereotypes.
And the writing style of women was found to be more successful at persuading online readers to hand over money.
On most platforms, crowdfunding donors support a worthy cause without looking for financial returns. Thus, effective appeals can take the form of compelling narratives that stir emotion rather than dry finance language.
The authors did a statistical analysis of nearly 9,000 small business and technology fundraising campaigns by solo entrepreneurs on Indiegogo between 2010 and 2013.
Crowdfunding campaigns that used emotional and inclusive language tended to succeed, while those that relied on dry language more often came up short. Interestingly, these effects didn’t depend on donor gender. Men and women responded about the same to the language style in pitches. —SZ