A2F Consulting for National Women’s Business Council
First published March 2018
Crowdfunding is a novel method for entrepreneurs to fund for-profit, cultural, or even community projects. Projects can vary widely both in terms of goal amounts and scopes. Despite fast growth, the crowdfunding market is still in a nascent stage of development, where future policies and regulations will be shaped by the behavior and experiences of investors (backers) and entrepreneurs (project creators). Existing research notes that crowdfunding can increase gender equality in capital markets by opening access to a broader variety of investors and allowing female entrepreneurs to participate in such markets more fully and actively.
Academic literature suggests that a social network can play an important role in helping project creators, particularly women, to succeed in crowdfunding. This stems from the fact that women, in general, are found to be more likely to have larger and closer social networks. Social networking provides entrepreneurs interested in crowdfunding with a unique opportunity to share their projects and ideas with their networks, interact with them, receive their feedback, and most importantly leverage their networks to promote their projects. To date, because of data constraints, as well as the novelty of the topic, very little is known about the role of social networking in facilitating success on crowdfunding platforms.
The study attempts to investigate, from a gender perspective, the role of a project creator’s online social network in contributing to the success of fundraising campaigns in reward-based crowdfunding. It also tries to provide a deeper insight into successful crowdfunding dynamics. Using a novel dataset received from Kickstarter (i.e. the largest reward crowdfunding platform in the U.S.) for the period between 2009 (its inception) and 2017, a series of logistic and linear regression analyses were conducted. These analyses were combined with comprehensive descriptive analysis and extensive visuals to better illustrate and explain the gender dynamics, as well as the relationship between women’s success and crowdfunding variables on Kickstarter.