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Here Is Why Women Have The Edge in Crowdfunding

Tue, Oct. 17, 2017 Posted: 12:56 PM


It’s no secret that women struggle in the world of venture capital and capital funding. There are many biases built in that work against women, from the way that venture capital firms are most likely to fund people in the area, to the way that few women sit on the boards of venture capital companies. Studies have shown that when two people deliver the exact same pitch, one a woman and one a man, the man is much more likely to received funding.

The question of why women struggle in these areas is multifaceted. A woman of color, or a woman who has children, may struggle to move in the circles of typically white men who are the most powerful venture capitalists. They may face internal biases from those they’re pitching; these investors may be societally conditioned to think of ideas from women as lesser, especially if the woman is also a person or color.

So it was surprising when researchers found that women on crowdfunding sites fared much better in terms of getting their ideas funded. So what made women succeed more easily in these crowdfunding scenarios?

Demographic factors
Crowdfunding approach is very personal and there is no special crowdfunding formula for every event. On many crowdfunding sites, there’s no real push to include many photos of the creation team. The focus is on the product itself. Without looking at the woman in front of them, presenting the final pitch, investors may not need to work past their internal bias and may be able to simply see the product, the story, and the potential.

But the biggest key?

Women Tend To Have Better Writing Styles
According to one landmark study, the way that women tend to write is better suited to the audience that visits crowdfunding websites. Women are more likely to tell stories, be passionate about their projects, and show the reader how the item will make their life better. Teams led by men are more likely to focus on the financial aspects of the project; how they will get enough money for the project, how finances will be used, and so forth. While this language is good for gauging overall project health, it doesn’t do much in terms of engaging a reader and convincing them to open their wallets.

So if we know a feminine style of writing is more likely to push a project over into successful funding, how do companies make that happen?

Here are a few ideas:

Get A Woman To Write The Story
No, not a joke. If there is a woman on the team, have her write the first pass of the crowdfunding copy. If you don’t have a woman on your team (why don’t you have a woman on your team?) consider hiring a freelance writer to create copy for you. Mimicking a feminine style will get a male writer a certain distance, but hiring a professional female storyteller may be a lot simpler and involve fewer revisions.

Whether a woman is being hired, a woman on the team is doing the writing, or someone else is trying to mimic the style that is most likely to fulfill funding, here are some tips to keep in mind.

Be passionate and tell a story
Narrative creates a vision, and vision creates excitement. If companies want investors to turn over their money, in a boardroom or on a website, they need to start by telling a story. In crowdfunding not everything is about money, showing how the product is going to specifically improve the life of the investor, or how it will change their community or their project for the better, are keys to building that excitement and interest.

Don’t focus on the numbers
Finances are important; it’s a great idea to show people where their money is going, and what potential for profit looks like as the product or service becomes more widely available. But these are not the most intriguing pieces at this level. Remember that crowdfunding attracts more casual audience members than a pitch meeting. Focus more on the emotion and the narrative; go into the finances, but let them be farther down the page.

Crowdfunding is not a replacement for women getting more equal treatment in the business investment world, but it is still an important step. As women show that they are just as capable of running businesses and creating profits as men, they will make their way onto the boards and teams that make the financing decisions. This will help companies overall become more equitable, especially when the women in question have additional marginalizations like disability, ethnicity, and more.

Margarita Hakobyan