Is Crowdfunding Leveling The Playing Field For Female Entrepreneurs?

For some, crowdfunding offers a way for underserved founders to snag much-needed early stage investment by cutting out unconscious bias.

Is Crowdfunding Leveling The Playing Field For Female Entrepreneurs?
[Photos: Claudio Divizia and ziviani via Shutterstock]

Women own more than 9.1 million businesses in the U.S., up from 7.8 million in 2007. These female-led companies employed nearly 8 million people and generated $1.4 trillion in sales last year.


Even though one in five firms in the country with revenue over $1 million is woman-owned, the U.S. Senate Committee on Small Business and Entrepreneurship found that female entrepreneurs receive fewer loans or get less favorable terms than men. An MIT study found that when women pitched investors for funding, they were less likely to score than a man delivering the exact same pitch.

As science slices and dices unconscious–yet stubborn–biases in an effort to eliminate the gender gap that prevents women from getting more funding, there is another channel that is giving women an equal shot to secure capital: crowdfunding.

By posting pitches for their projects to online platforms such as Kickstarter and Indiegogo, female founders were more likely to secure funding, researchers from NYU and Wharton discovered. Women-only teams had a 40% better chance of meeting fundraising goals. In tech, the success rate for women-led Kickstarter projects was 65% as opposed to just 35% for men. On private equity platform for consumer businesses CircleUp, female founders are nine times more successful raising capital than with traditional banks, and five times more successful that with venture capital investors, according to data supplied by CircleUp.

A Buffer Against Unconscious Bias?

Bonnie Marcus, author of The Politics Of Promotion, who has been both an entrepreneur and a corporate executive, maintains that online platforms level the playing field by providing a buffer to diffuse unconscious bias. “It is easier for venture capital firms to focus on the risk benefit calculation of the deal rather than the gender dynamics that might occur when a woman is pitching them face to face,” she tells Fast Company.
During a live pitch session there is much more emphasis on the delivery of the pitch, Marcus notes. In addition to confidence, Marcus says women need to understand their audience and how to best communicate this pitch to each firm, instead of using a generic approach. Crowdfunding eliminates the presentation. “It allows women to carefully craft their pitch in a dynamic and compelling manner. The online platform provides the opportunity to write strong profiles that represent the leadership qualities investors are seeking,” she observes.


Courtney Nichols Gould, cofounder of SmartyPants vitamins and a serial entrepreneur, had plenty of experience raising capital before she tried an online platform. She asserts that she hasn’t really experienced much bias since working on SmartyPants, but admits her background in sales may have “inoculated” her against such prejudices.

“I will say in some meetings, folks would naturally direct their eye contact to Gordon, my co-CEO, and it was only after we would start talking that they would start addressing some of their questions to me, but that was a minority,” Gould says. “If you really know the fundamentals cold, it tends to build trust and they are investing in you at that stage more than the company. You are the company,” she contends. “Passion also matters,” she adds, “but I have seen more women nail the passion part and fall down on the numbers than the reverse.”

Though she’d been at plenty of startups, Gould admits this was her first foray as a consumer product company, and therefore had fewer investor connections. SmartyPants had already raised a seed round with angel investors, but fast growth is cash intensive, Gould says, so it’s often better to raise smaller rounds more frequently. That’s when she went to CircleUp. On the private equity platform, she says, “We were able to reach a large group of investors who had an expressed interest in and/or track record with investing in consumer product goods companies.”

Gould says pitching on the platform was a time saver when they only had a few people on staff. “Being able to post our numbers and deck online, share our story, and answer questions on one or two phone calls is very material to meeting the exact forecasts you are sharing,” she says. Sharing samples with a large group of influencers was like having a free focus group. “And at the worst case, [if we didn’t raise money] we would gain some customers,” says Gould. SmartyPants raised a total of $4.7m in two rounds on CircleUp.

Crowdfunding Is Universal

Ryan Caldbeck, CEO of CircleUp, doesn’t believe the success of crowdfunding is gender-specific. “Entrepreneurs in general are not well served by the existing closed network of funding,” he tells Fast Company. “Online marketplaces are open and transparent. The result is quality entrepreneurs find success more efficiently.”

Caldbeck hasn’t observed anything women are doing differently than men on the platform. He says that founders who’ve successfully raised funds on CircleUp share three traits regardless of gender:

  • They are experts in their business–on top of the numbers, with a clear understanding of the drivers for growth and the market overall.
  • They are also responsive and direct with investors, quickly responding and demonstrating their knowledge of the business and market.
  • They are great communicators. They are able to share their vision with investors in a concise but inspiring way.

Caldbeck believes that unconscious bias will continue whether fundraising takes place online or in person. What will change, says Caldbeck, is that traditional gatekeepers for financing will no longer be the only ones who hold the key to investment money.

“The next decade will be great for female entrepreneurs, as online platforms provide access to large networks of investors in an efficient process,” says Caldbeck, adding: “They are a clearly identifiable group that is benefiting from this transformation, but there are many others, including entrepreneurs in rural areas.”

About the author

Lydia Dishman is a reporter writing about the intersection of tech, leadership, and innovation. She is a regular contributor to Fast Company and has written for CBS Moneywatch, Fortune, The Guardian, Popular Science, and the New York Times, among others.