Gender in Start-up Financing: Evidence from Equity Crowdfunding

51 Pages Posted: 11 Mar 2021

See all articles by Thomas F. Hellmann

Thomas F. Hellmann

University of Oxford - Said Business School; University of Oxford - Said Business School; European Corporate Governance Initiative

Ilona Mostipan

Analysis Group; University of Oxford, Saïd Business School

Nir Vulkan

University of Oxford - Said Business School

Date Written: January 18, 2021

Abstract

It is well known that start-ups with female founders often raise less money than their male counterparts; the question is, what drives this? We exploit the unique features of equity crowdfunding to disentangle the choices made by entrepreneurs and investors. We find that female teams set lower fundraising goals, are equally likely to achieve their minimum goal, and end up raising significantly less. Guided by a simple theory of optimal fundraising, we find that assortative matching (where investors prefer to invest in their own gender) can explain some but not all of the female funding gap. One interesting finding is that female start-ups wait longer before closing their campaigns, suggesting that they want to raise more than what they originally asked for. Overall, the analysis suggests that female founders ask for less, get less, but do not necessarily want less.

Keywords: Entrepreneurial Finance, Equity Crowdfunding, Gender, Start-Ups, Fundraising

JEL Classification: G24, J16, L26

Suggested Citation

Hellmann, Thomas F. and Mostipan, Ilona and Vulkan, Nir, Gender in Start-up Financing: Evidence from Equity Crowdfunding (January 18, 2021). Available at SSRN: https://ssrn.com/abstract=3768361 or http://dx.doi.org/10.2139/ssrn.3768361

Thomas F. Hellmann (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

European Corporate Governance Initiative ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Ilona Mostipan

Analysis Group ( email )

San Francisco, CA 94111
United States

University of Oxford, Saïd Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Nir Vulkan

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 01865 288929, or 288338 (Phone)
+44 01865 288805 (Fax)

HOME PAGE: https://vulkan.worc.ox.ac.uk/

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