Women Enjoy Crowdfunding Success

Women are better at telling a story that resonates with potential crowdfunding investors.
Women Enjoy Crowdfunding Success
WHILE WOMEN STILL HAVE a harder time than men do when it comes to securing bank loans and receiving funding from venture capitalists, they’re ahead of men in one particular area: crowdfunding. The reason is simple, say Andreea Gorbatai, an assistant professor at the Haas School of Business at the University of California in Berkeley, and Laura Nelson of Northwestern University’s Kellogg School of Management in Evanston, Illinois. Women are better at crafting the kind of emotional language that will appeal to donors.

In an unpublished paper, Gorbatai and Nelson point out that crowdfunding pitches rely heavily on the written word, and previous studies have shown that women tend to express more emotion in their written styles than men do. That’s important because online donors are more interested in supporting a worthwhile cause than in getting a return on their investments.

To support their hypothesis, the researchers examined about 9,000 fundraising campaigns on Indiegogo, an online crowdfunding site, between February 2010 and December 2013. They analyzed the language of funding appeals by four measures: emotional content, descriptive vividness, inclusiveness, and the terms used to discuss money and finance.

They found that pitches created by women were more likely to employ language that was positive, vivid, inclusive, and largely free of business jargon. At the same time, they found that campaigns that used emotional and inclusive language were more successful than those that employed dry business language. Both male and female investors responded to emotional, inclusive appeals; on the other hand, the vividness of the wording had little effect on success. As Gorbatai observes, “Women are better at telling a story that resonates with potential crowdfunding investors.”

Read more: “The Narrative Advantage: Gender and the Language of Crowdfunding”