Abstract
PurposeWomen’s entrepreneurial activity can significantly impact economic and social development globally, particularly in developing countries. The significant challenges entrepreneurial women face draw the attention of researchers and policymakers. This paper aims to analyse the impact of gender disparity on the likelihood of obtaining equity financing through crowdfunding. The equity crowdfunding industry was selected because it is a non-traditional financial market where gender bias may act differently for women.Design/methodology/approachTo investigate the relationship between gender and equity financing through crowdfunding, this paper applies ordinary least squares regression. The analysis is based on a unique data set of 492 equity crowdfunding campaigns launched between 2013 and 2017 on all existing platforms in Brazil, Chile and Mexico.FindingsThe analysis reveals that the involvement of at least one woman on the board of firms seeking equity financing increases campaign success rates in terms of the investors’ average pledge, the target amount reached at the end of the campaign and the percentage raised at the end of the campaign exceeding the initial fundraising goal. Altogether, this suggests that equity crowdfunding campaigns should be based on gender equality in the firms’ boards. The research finds evidence that there is no gender disparity in the likelihood of a campaign being financed by a greater number of investors.Practical implicationsThese findings have implications for Latin American female entrepreneurs when selecting funding sources and policymakers when defining political actions to remove the barriers at the root of this historic inequality in female entrepreneurs’ access to finance.Originality/valueTo the best of the authors’ knowledge, this document analyses the gender disparity in the Latin American equity crowdfunding market, shedding light on women’s access to crowdfunding financing for the first time.
Highlights
The existence of gender-based differences in entrepreneurial activity is widely recognised in the entrepreneurship literature (Gupta et al, 2009), individual studies differ as to the origins and implications of the differences identified (Bruni et al, 2004; Ahl, 2006; Hechavarria et al, 2017; Kanze et al, 2018)
The analysis reveals that the involvement of at least one woman on the board of firms seeking equity financing increases campaign success rates in terms of the investors’ average pledge, the target amount reached at the end of the campaign and the percentage raised at the end of the campaign exceeding the initial fundraising goal
The presence of at least one woman on the entrepreneurial team increases the probability of success of equity crowdfunding campaigns in terms of the target amount reached at the end of the campaign
Summary
The existence of gender-based differences in entrepreneurial activity is widely recognised in the entrepreneurship literature (Gupta et al, 2009), individual studies differ as to the origins and implications of the differences identified (Bruni et al, 2004; Ahl, 2006; Hechavarria et al, 2017; Kanze et al, 2018). Only 6 countries out of 54 surveyed in 2018 have shown equal Total Entrepreneurial Activity rates between women and men. In Latin America, female entrepreneurship lags behind more advanced economies (Amoros and Pizarro, 2007; Allen et al, 2008). Despite significant progress in the number of female entrepreneurs [1], new-business activity for women is endangered by the inadequacy of early-stage funding (Terjesen and Lloyd, 2015). Due to the lack of participation by females in new business activities, many Latin American countries are not realising their full entrepreneurial potential (Terjesen and Amoros, 2010). A lower number of female entrepreneurs results in less innovation, less export potential, fewer jobs created and, less economic growth in the country (Terjesen and Lloyd, 2015)
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