It’s well known that women struggle to attract their fair share of venture capital finance. Research from the Technical University of Munich suggests this is not the case when it comes to reward-based crowdfunding, however.
The study finds that when using crowdfunding, female entrepreneurs can especially benefit from using innovative language when launching their campaigns, with this found to work even when launching in traditionally male categories.
Female success
The research builds on findings from PwC that found that female entrepreneurs are 32% more likely to succeed on crowdfunding platforms than men, which is obviously a stark contrast to that in more traditional fundraising contexts.
The researchers used something known as Expectancy Violations Theory to base their study upon. This helps us to explain when stereotypes are confounded, and what happens when they are.
“In our case, we study two expectancy violations for women: first, when women portray their crowdfunding campaigns as innovative (because innovation behavior is stereotypically portrayed as a masculine attribute), and second, when women launch their campaigns in a male-stereotyped category like technology” the researchers explain.
Innovation language
The researchers tested the impact using innovation language via a field study conducted on Kickstarter alongside a second study on Mechanical Turk to examine the interpretation of the claims made during a campaign by backers. This showed that backers tend to trust women’s ability to fulfill their claims in a stereotypically male category than in a stereotypically female category.
The results suggest that whether counterstereotypical behavior was rewarded or punished depended on a couple of factors: the attitude backers had towards the entrepreneur, and then whether the behavior itself was interpreted as positive or negative.
“In crowdfunding, the overall tendency to fund women preferentially as compared to men suggests that even ambiguous counterstereotypical behavior will be evaluated positively for women,” the researchers explain.
This is further amplified whenever the campaign is in a stereotypically male category. The findings mean that female entrepreneurs can benefit from using more innovative language when they’re launching campaigns in such categories.
