Gender Dynamics in Crowdfunding (Kickstarter): Evidence on Entrepreneurs, Investors, Deals and Taste-Based Discrimination

64 Pages Posted: 29 May 2014 Last revised: 21 Jul 2016

Dan Marom

Hebrew University of Jerusalem - Jerusalem School of Business Administration

Alicia Robb

University of California, Berkeley - Coleman Fung Institute for Engineering Leadership; Kauffman Foundation; University of Colorado at Boulder

Orly Sade

Hebrew University of Jerusalem - Department of Finance

Date Written: February 23, 2016

Abstract

In this paper we investigate whether a new form of venture financing – crowdfunding – reduces the barriers of female entrepreneurs to raise capital. Specifically, we investigate gender dynamics and biases in the process of raising funding to new projects via the leading crowdfunding platform – Kickstarter. We find women made up about 35% of the project leaders and 44% of the investors on the platform. On average, men seek significantly higher levels of capital than women for their projects, and also raise more funds than women. However, women enjoy higher rates of success in funding their projects, even after controlling for category and goal amount. Only about 23% of projects that men invested in had female project leads. Conversely, more than 40% of projects that women invested in had female project leads. Multivariate analysis indicated significant positive correlation between the gender of the project leader and the percentage of the same gender investors. Questions arise around what factors explain the fact that female-led projects are predominantly financed by women. In an attempt to disentangle taste-based discrimination from statistical discrimination we conducted a survey of investors from the Kickstarter platform and find evidence that some of lower investment in female-led projects by men can be attributed to taste-based discrimination.

Keywords: crowdfunding, startup capital, gender

Suggested Citation

Marom, Dan and Robb, Alicia and Sade, Orly, Gender Dynamics in Crowdfunding (Kickstarter): Evidence on Entrepreneurs, Investors, Deals and Taste-Based Discrimination (February 23, 2016). Available at SSRN: https://ssrn.com/abstract=2442954 or http://dx.doi.org/10.2139/ssrn.2442954

Dan Marom

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel

Alicia Robb

University of California, Berkeley - Coleman Fung Institute for Engineering Leadership ( email )

130 Blum Hall #5580
Berkeley, CA 94720-5580
United States

Kauffman Foundation ( email )

4801 Rockhill Road
Kansas City, MO 64110-2046
United States

HOME PAGE: http://www.kauffman.org/kfs

University of Colorado at Boulder ( email )

1070 Edinboro Drive
Boulder, CO 80309
United States

Orly Sade (Contact Author)

Hebrew University of Jerusalem - Department of Finance ( email )

Mount Scopus
Jerusalem, 91905
Israel
972 2 588 3227 (Phone)

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