From Seeker Side to Investor Side: Gender Dynamics in UK Equity Crowdfunding Investments

Abstract

Crowdfunding has come to play a significant role in the democratisation of financial markets and provides more accessible funding, especially for women entrepreneurs. The aim of this work was to analyse gender dynamics from both the seeker and the investor sides. From the seeker side, we attempted to establish whether female-led campaigns are correlated with a high success rate in terms of overfunding level and the number of investors involved. From the investor side, we examined which aspects drive female investments. Our analysis was conducted on Crowdcube, a British equity crowdfunding platform, from 2011 to 2016, and we explored 81 equity crowdfunding campaigns participated by 5966 investors. Results show that equity crowdfunding campaigns’ success is not correlated to the proponent’s gender, and that female investment decisions show a similarity effect between seekers and investors. From a theoretical perspective, our findings shed new light on how individual characteristics can be an important factor in financing situations. Our results allow entrepreneurs and equity crowdfunding platforms to better understanding potential investor behaviour and highlight the role of equity crowdfunding as a tool for women’s financial inclusion and the empowerment of female entrepreneurs.