Can Equity Crowdfunding Mitigate the Gender Gap in Startup Finance?

39 Pages Posted: 28 Aug 2018 Last revised: 17 Apr 2020

See all articles by Erin McGuire

Erin McGuire

Scheller College of Business, Georgia Institute of Technology

Date Written: March 16, 2020

Abstract

It is well documented that firms led by females do not obtain capital investment at the same rate as males. Part of the reason behind this funding gap is gender-based differences in access to investors. In this study, I evaluate the effects of the 2012 legislation that legalized accredited equity crowdfunding and relaxed regulations on advertising private firm equity offerings. Using a novel dataset of startups and financing sources, I find that the policy change decreased the gap in average funding to male-founded firms and firms with female founders by 3 percentage points. I argue that the mechanisms behind the change are increases in both female investor activity and investment to industries with a higher concentration of female firms.

Keywords: Gender Gap, Startups, Crowdfunding

JEL Classification: J16, M13, L26

Suggested Citation

McGuire, Erin, Can Equity Crowdfunding Mitigate the Gender Gap in Startup Finance? (March 16, 2020). Available at SSRN: https://ssrn.com/abstract=3233809 or http://dx.doi.org/10.2139/ssrn.3233809

Erin McGuire (Contact Author)

Scheller College of Business, Georgia Institute of Technology ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

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