Crowdfunding helps women succeed in science and technology because venture capital does not.


Statistics for women in the tech industry are bleak. In 2017, women entrepreneurs only received 2% of venture capital, which is usually an important part of entrepreneurial growth and success. Although women’s unique perspectives can promote men’s innovation in other areas, men may overlook this point (just look at PopSci’s report on incredibly creative “heels”), and their views are often felt in Silicon Valley. Ignore. Silicon Valley is a male-dominated industry, where the number of male partners in venture capital funds exceeds that of female partners by 16 to 1. For example, start-up companies that focus on their mothers have struggled to obtain funding, although the demand for smarter, more comfortable breast pumps is clear.
But in the tech industry, women seem to have a haven: crowdfunding sites Kickstarter and Indiegogo. On these platforms, women entrepreneurs can present their views directly to potential customers, and women achieve their own financing goals more successfully than men. Ethan Mollick, an associate professor of management at the Wharton School at the University of Pennsylvania and an expert on gender and crowdfunding crossovers, has been analyzing crowdfunding data for years to find out why. He said that all this is due to a sense of connection that can be promoted by crowdfunding activities.
Crowdfunding can take a number of different routes. Equity financing allows people to exchange funds with a certain percentage of the company and future profits. Funding based on donations means that people give money without getting any reward simply because they believe in the eyes of your art or entrepreneur. (The “crowd” here is usually your close friend or grandmother). There is also reward-based crowdfunding, the most popular crowdfunding method, which can be seen on both Kickstarter and Indiegogo. In this case, people will use a small amount of money in exchange for future returns, such as a woolen coat that is all weather or a collapsible cup.
Therefore, companies that are most likely to succeed on these platforms will receive some kind of reward. Mollick said: “When it comes to consumer orientation, when you get something, and when you have an existing community, crowdfunding is really effective.” For example, entrepreneurs have achieved unprecedented success in crowdfunding platform games. Mollick said that the market is full of passionate people who provide you with funding not only because they trust you but also because their return is a new board game.
Consumer hardware companies have also been successful at Kickstarter and Indiegogo for similar reasons. Gadget geeks and gear supervisors are always looking for the next big thing, and crowdfunding websites, often launching new products when new products are still prototypes, will be able to easily innovate. In a traditional male-dominated space, female crowdfunding activities have been successful.
Mollick said: “Women perform better than men, just like video games and technology projects.” But how much? He said: “All things are equal, a woman and a man want to be the same project. To raise the same amount of money, a woman is 13% more likely to succeed.” In terms of technology, Mollick also found that women’s leadership campaigns reached 65% of their fundraising goals, compared with 30 for men. %. Although at the time of the study, women accounted for only 10% of the scientific activities on Kickstarter.

With the confirmation of the centrality of gender, Mollick shifted his attention from the founder of the company to the crowdfunding company that supports them. Who has invested so much in women entrepreneurs? It turns out that other women have been driven by a special kind of unity, which Mollick calls “activity-driven homogeneity.”
Homogeneity is a short story: “Things gather together and people gather in groups.” Through experiments and observational studies, Mollick found that compared to male entrepreneurs, female investors value female entrepreneurs more because they value the similarities of female entrepreneurs. However, homogeneity is not enough for anyone to invest their hard-earned money in crowdfunding activities. This is the entry point for radicalism. Mollick said: “One-third of (women’s Kickstarter investors) are more inclined to think that women are better and give money to those women.” In other words, a relatively small group of active women, in women entrepreneurs Among the successes of crowdfunding, especially those who are trying to succeed in a male-dominated area, there have been significant differences.
Of course, in the field of science and technology, crowdfunding is far from a panacea for gender differences. It usually does not work for companies that have no real rewards, such as software companies. More importantly, once production begins, it cannot make up for other sources of funding, such as venture capital funds (also called “risk investments”). But for many women entrepreneurs, crowdfunding has proved to be indispensable.
Elin Elkehag is the founder of Stilla Motion, Inc., which produces an alarm clock that alerts your phone if your bag is moving when your bag is activated. . When Elkehag first founded her company, she used Indiegogo to raise funds and to investors (and herself) to prove that the market for this product was there. In just 100 days, she tested dozens of different versions of the device and solicited feedback from friends and family members. Finally, she posted “Stilla” on the Internet, hoping to have some funds available for use. “We reached our goal within 10 hours,” she said.
Although Indiegogo allowed her to get the company out of the ground, Elkehag could not have built “Stilla” on his own crowdfunding alone. With her product improvement and business development, Elkehag eventually needed funding for venture capital from investors who sought to invest in startups in exchange for company equity or other support.
Elkehag said that setting up her Indiegogo campaign is a breeze because she believes in this product and can communicate directly with consumers. She knows that she can find women who want to solve the common problems of lost or stolen handbags. But Elkehag found that selling his ideas to venture capital funds is completely different, because venture capital is not just about a good idea, but about ensuring future success. “I prefer low commitments and overfulfillment.” I want to know that I can keep my promise.
Although Elkharg eventually managed to raise more money, when she invested in the venture capital, she completely experienced what Mollick’s data predicts: the opposite of homogeneity. Although crowdfunding can allow tens of thousands of people to come into contact with your product—some of whom will inevitably become activists—most venture capital funds are made up of a small group of people. Moreover, research shows that many male venture capitalists have implicit biases against women, that women are less tenacious, or that their companies may perform poorly.
“If you want to chase venture capital, you have to learn to play this game.” However, Indiegogo can make the game field more fair, “said Elkehag. “Even if you don’t have this bold personality… (from crowdfunding activities ) Numbers can also help you speak for yourself. ”


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