Women outperform men on Kickstarter

Leanne Brown funded her new cookbook "Good and Cheap" with crowdfunding site, Kickstarter. Photo / AP

Women still face disparities in the workplace - female workers on average are paid 77 cents for every dollar male workers make and only 4.2 per cent of chief executives at Fortune 500 companies are women.

But a recent study shows women outperform men in raising money online via crowdfunding sites, such as Kickstarter, where backers make monetary contributions to projects they like in exchange for small rewards - such as sharing a piece of the project and getting limited editions of the creative works.

The study, written by assistant professors Jason Greenberg of New York University and Ethan Mollick of the University of Pennsylvania, randomly selected 1,250 Kickstarter projects from 2010 to 2012 that sought at least $5,000, in five categories: gaming, technology, film, fashion and children's book publishing.

The categories were chosen based on the gender distribution of project founders and backers.

Gaming and technology are male-dominated; film is evenly weighted in terms of gender; fashion and children's books have higher proportions of female founders and backers.

The study found that women overall were 13 per cent more likely to meet their Kickstarter goals than men, and the effects were especially evident in the area of technology.

Although less than 10 per cent of the technology projects featured female-led teams, 65 per cent of those projects reached their fundraising goals. Just 30 per cent of male-led ventures succeeded.

Crowdfunding is a viable way for entrepreneurs to get initial financing for their new ventures.

In a separate 2014 study, Mollick and other researchers found that 90 per cent of successful crowdfunding projects turned into ongoing ventures.

For example, Oculus Rift, a virtual reality firm that was crowdfunded, was bought by Facebook for $2 billion in 2014.

Mollick wrote that women's success on Kickstarter is primarily driven by female backers who disproportionately support female founders in areas such as technology, where women have long been underrepresented.

Another reason, cited by Alicia Robb, a senior fellow at the Ewing Marion Kauffman Foundation, is that female entrepreneurs tend to launch ventures that seek less financing than men's projects, according to The Wall Street Journal.

But women are still more successful in crowdfunding even when they are asking for similar amounts of money.

Besides women's success on Kickstarter, The Wall Street Journal also cited data from another crowdfunding site, Indiegogo, that shows a similar trend.

Indiegogo says women are 61 per cent more likely than men to meet their financial goals on its site, where female-led projects account for 41 per cent of small business, technology and other entrepreneurial campaigns that meet the funding goals.

- Washington Post