Abstract
This paper is an exploratory attempt to understand gender-related differences in the behavior of investors in firms seeking equity financing. Using data from the Swedish equity crowdfunding platform FundedByMe, we find that female investors are less likely to invest in the equity of firms that are younger and high tech and have a higher percentage of equity offerings. This pattern seems consistent with a greater risk aversion in female versus male investors. Furthermore, female investors are more likely to invest in projects in which the proportion of male investors is higher.
Highlights
With accelerating growth in the popularity of equity investments facilitated through equity crowdfundingElectronic supplementary material The online version of this article contains supplementary material, which is available to authorized users.K
We draw from an established body of literature arguing that gender-related differences of investment behavior are due to risk preferences and investigate whether female investors are more risk averse in equity crowdfunding
Given the role played by gender in risk-taking behavior, we expect that female investors, compared to their male counterparts, are less likely to invest in risky firms in the equity crowdfunding
Summary
Electronic supplementary material The online version of this article (doi:10.1007/s11187-016-9825-7) contains supplementary material, which is available to authorized users. Investment behavior is likely to depend on investor gender (for recent reviews, see Croson and Gneezy 2009 and Bertrand 2011) evidenced by experimental studies, pension wealth asset allocation choices, or managerial firmlevel investment decisions (Jianakoplos and Bernasek 1998; Barber and Odean 2001) To further such evidence, in an explorative study, we seek to shed light on gender-related differences of investment decisionmaking in the setting of equity crowdfunding. We draw from an established body of literature arguing that gender-related differences of investment behavior are due to risk preferences and investigate whether female investors are more risk averse in equity crowdfunding. This is of great importance as equity crowdfunding features two distinct characteristics for investors. We present the study’s conclusions and discuss our findings and the limitations of this research
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