It is widely known in the global tech industry that female entrepreneurs are facing a massive challenge in raising funds from venture capital firm — so much that Vivoom co-founder and CEO Katherine Hays said that if she were a “21-year-old male in a hoodie,” her company would be “even more appealing” to potential investors.
But the case seems to be different with seed crowdfunding, according to a new report released by PwC and The Crowdfunding Centre.
Called Women Unbound: Unleashing female entrepreneurial potential, the report finds that while men clearly use seed crowdfunding more than women, women are more successful at crowdfunding than men.
The report was based on two full years of seed crowdfunding data, from 2015 to 2016, tracked by The Crowdfunding Centre. It includes the results of over 465,000 seed crowdfunding campaigns from nine of “the largest” crowdfunding platforms globally.
It revealed that while 17 per cent of men-led campaigns reach their finance target, 22 per cent of female-led campaigns actually managed to reach theirs. Overall campaigns led by women were 32 per cent “more successful” at reaching their funding target across a wide range of sectors, geography and cultures.
Even in ASEAN
Even when the data is segregated into different sectors and countries, women-led campaigns are performing better.
In countries such as the UK and the US, where the volume of seed crowdfunding is the largest, 24 per cent (US) and 26 per cent (UK) of women successfully reached their campaign funding target, as compared to 20 per cent of men in both countries.
Even in a traditionally masculine sector such as technology, where the report sees nine male seed crowdfunders for technology ventures to every one female crowdfunder, 13 per cent of women were successful in achieving their goal compared to just 10 per cent of men.
Meanwhile in Asia, the report analysed 6,713 campaigns and it discovered that 14 per cent of female-led campaigns reached their target compared with just seven per cent of male-led campaigns.
In E7 countries (China, India, Brazil, Mexico, Russia, Indonesia, and Turkey), 10 per cent of female-led campaigns reached their goals compared to four per cent of male-led campaigns.
However, the report also highlighted an important finding: Men continue to use seed crowdfunding substantially more than women, and they also raise substantially more finance than female-led campaigns.
Eighty-nine per cent of campaigns raising over US$1 million were male-led campaigns, as compared with 11 per cent of female-led campaigns.
Ladies, aim higher!
Though the report concluded that female entrepreneurs were able to secure their funding goals, male entrepreneurs continue to raise substantially more finance. What is the reason behind this?
There are two explanations that the report came up with.
The first is that significantly there are more men raising seed fund through crowdfunding, and as a result, they were able to raise substantially more finance via this channel.
The second is that male entrepreneurs tend to be “more ambitious” in setting their funding goals.
In Asia alone, there is a 31 per cent difference between the average pledge amount for campaigns led by male entrepreneur (US$105) and the average pledge amount for female-led campaigns (US$80).
A similar situation happened in ASEAN where there is a 27 per cent difference between male-led campaigns (US$89) and female-led campaigns (US$70).
PwC Singapore Diversity Leader Karen Loon said that there remains a “significant opportunity” for women to be more actively involved and represented in crowdfunding.
She stressed that women need “to be more ambitious” when establishing their finance raising goals.
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