Why are women more successful at crowdfunding?
Women having a higher crowdfunding success rate, so why are they more hesitant to launch a crowdfunding campaign?
Last month, PwC in collaboration with The Crowdfunding Centre released new research which has provoked much debate among the crowdfunding community and beyond.
The research revealed that women are more successful at reaching their seed crowdfunding target than men – 32% more likely to be exact – but far less likely to put forward a project to the crowd, according to the two-year study analysing 450,000 worldwide campaigns.
Women were also able attract an average a higher individual pledge amount than men, averaging $87 per funder, compared to $83 for men.
So why the higher success rate?
Soft Skills Engage the Crowd
Selling your idea to the crowd and getting investors on-side requires a strong character and honed social skills. Women often perform strongly in terms of soft skills, such as communication, organisation, listening and sociability – attributes that can be particularly useful when trying to connect with a diverse crowd.
Women also tend to be more empathetic which can help them identify key benefits, rather than focusing on technical features as men often do.
Let’s take two key attributes found in an empathetic person – the willingness to listen, and humility.
So, when it comes to feedback from the crowd and investors, women might just be better at truly listening to what the crowd are saying, taking into account what they are doing both right and wrong, and adapting their campaign accordingly.
“Female crowdfunders also tend to use more emotional and inclusive language in their videos and pitch descriptions than men,” according to the report. This communication style is better at engaging backers of both genders and is “positively correlated with fundraising success.”
More Developed Ideas
The PwC findings can also be understood as a matter of statistics. Fewer female entrepreneurs launch crowdfunding campaigns, yet they are more successful. This indicates that they spend more time developing their business, setting a higher confidence threshold before launching crowdfunding.
Meanwhile, men have a tendency to be overconfident in their ideas and ability to figure things out on the fly. As such, they’re probably more likely to launch a campaign prematurely or with an under-developed idea.
So, women may undertake fewer campaigns, but achieve a higher success rate due to well-developed ideas ready for the crowd to give their verdict.
In our experience…
Of course, these differences are sweeping generalisations and there are exceptions to prove every rule. But by considering the PwC report and what it means, we can discover insights that will help both genders become more successful in crowdfunding.
Identifying successful crowdfunding attributes from both male- and female-led campaigns helps us develop a reliable template for success. For men, that might involve developing ideas more thoroughly and honing a message that communicates benefits in an honest and engaging way. For women, it might mean going in with more confidence and having the flexibility to work things out on the fly.
From the amazing female entrepreneurs we’ve worked with, it’s clear that women excel at crowdfunding campaigns. Hopefully we see more and more women entering the world of crowdfunding, and more men learning from their success!