Can Equity Crowdfunding Mitigate the Gender Gap in Startup Finance?
39 Pages Posted: 28 Aug 2018 Last revised: 17 Apr 2020
Date Written: March 16, 2020
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: Suggested Citation