Ventureneer, a company dedicated to online education and peer support for social entrepreneurs, non profit leaders, and small business owners with a social mission, recently released a report that reveals why women entrepreneurs are still significantly behind men when it comes to funding and growing their businesses – and identifies crowdfunding as the secret weapon they’re underutilizing that could change the status quo once and for all.
Stand out in the Crowd: How Women (and Men) Benefit from Equity Crowdfunding offers an in-depth analysis of the current state of women’s entrepreneurship, including obstacles and opportunities for growth – such as the discovery that women tend to outperform men in crowdfunding, yet have not taken advantage of this hidden opportunity to more aggressively start and grow their businesses.
The research, which was conducted by founder and president of Ventureneer, Geri Stengel, shows how equity crowdfunding has the potential to change the way women successfully fund the operation and growth of their businesses. The report found women who raise equity financing online through crowdfunding are achieving a higher success rate than those raising money offline: 24% for online compared to 19% for offline. In addition, success rates of men and women raising equity financing are currently the same. Women are also outperforming men on specific equity and rewards-based crowdfunding platforms. This is the first evidence that women outshine men when raising financing.
“Today there are more women-owned and run businesses in the United States than ever before, yet these businesses are a third less likely to surpass $1 million in revenue compared to men. Crowdfunding, specifically equity crowdfunding, is leveling the playing field for female founders with skills, ability and ambition to scale companies, who might have previously encountered pushback and closed doors from the traditional boys’ club of VC firms.”
While crowdfunding is currently showing promise to help solve the problem women founders are facing in getting funded, including discrimination, unconscious bias and a lack of knowledge as to which fundraising platform is the best for their business, Stengel also reports on the need for more men and women to invest in women. Currently, only 19% of angel investors are women, and research has proven they make better investors than men because of the time they research their investment choices, how long they hold onto their investments and the lower risk they’re willing to take. While men take up the majority of investors, unconscious bias toward women founders is likely one of the biggest issues ahead for male venture capitalists.
Douglas Ellenoff, partner at Ellenoff Grossman & Schole, a securities and crowdfunding law firm, added:
“From speaking with our networks of contacts in the crowdfunding industry over the last several years and reviewing the results of our sponsored research on the subject, early results do confirm that women entrepreneurs do enjoy a statistically significant benefit over their male counterparts raising capital online.”
Stand out in the Crowd: How Women (and Men) Benefit from Equity Crowdfunding is underwritten by Dell Inc. and Ellenoff, Grossman & Schole.
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