Whether you’re planning on completely transforming the world as we know it or you just want to put on a performance in your local park, if you’re a woman with an idea, your best investment strategy might be to turn to the people.
According to a recent report, women who use popular crowdfunding website Kickstarter to garner investments have a slightly higher success rate than men. Almost 70 percent of female fundraisers reach their goals, compared to about 61 percent of their male counterparts.
David Gallagher, Kickstarter’s director of communications, attributes this near-parity to the crowdfunding model’s game-changing knack for cutting out middlemen.
“It’s just about presenting your idea to people and saying, ‘This is what I want to do — if you want to be a part of it, support my project,’” he said. “So in that sense, it may not have the institutional biases that are present in other forms of financing.”
Those biases are definitely real: approximately 19 percent of angel funding and just 6 percent of venture capital is allotted to female entrepreneurs. Kickstarter and other similar sites, then, are doing more than “leveling the playing field,” as Gallagher said — they’re changing the game completely.
He pointed to Goldieblox as an example of an ultra-successful female-led Kickstarter project.
In 2012, Debbie Sterling posted her idea, a toy and book series designed to get more young girls interested in the male-dominated field of engineering, on the site, and had raised almost 200 percent of her $150,000 goal after 30 days.
“Now you can buy her products in toy stores all over the country, and Goldieblox has become a full-fledged company,” Gallagher said.
Projects aimed at getting kids excited about STEM (science, technology, engineering and math) fields are especially successful on Kickstarter, according to Gallagher, and women are taking note: he singled out LabCandy as another such proposal.
LabCandy is a startup headed by Yale student Olivia Pavco-Giaccia that produces “lab gear, storybooks and science activities for young girls” in an effort to change the traditional Einstein-esque, male-centric image of modern scientists. The project was posted to Kickstarter on Aug. 19, and had raised more than 75 percent of the requested $20,000 within three days.
But that doesn’t mean you have to be interested in science to achieve your fundraising goals: the study was conducted with regards to Kickstarter as a whole, and therefore rings true for projects from all of the site’s wide variety of categories, from comics to food to theater.
Besides the inherently equalizing quality of crowdfunding, the makeup of the crowd itself plays a significant role in women’s success on the platform, said Alicia Robb, one of the study’s authors.
The report shows that, unlike in other modes of investment, there’s almost a 50-50 split between male and female investors on Kickstarter.
“I wasn’t necessarily surprised by the fact that women were more successful in getting funds or by their high rates of participation on the project leader side,” Robb said, “but the high rate of female investors was unexpected.”
Furthermore, Robb and her fellow researchers found that woman-led projects attracted more female than male investors.
The results of the study argue that women with great ideas should bypass traditional routes to investment and turn to crowdfunding sites like Kickstarter instead. And as this success continues, Robb speculated, female entrepreneurs will gain the experience and inspiration necessary to effectively seek funding for their ideas across all investment platforms, and more investors — both male and female — will be motivated to donate.