Top

Published in:

2019 | OriginalPaper | Chapter

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

Authors : Valeria Venturelli, Alessia Pedrazzoli, Elisabetta Gualandri

Published in: Frontier Topics in Banking

Publisher: Springer International Publishing

Activate our intelligent search to find suitable subject content or patents.

search-config

AI-assisted search

Off

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.

Dont have a licence yet? Then find out more about our products and how to get one now:

Springer Professional "Wirtschaft+Technik"

Online-Abonnement

Mit Springer Professional "Wirtschaft+Technik" erhalten Sie Zugriff auf:

über 102.000 Bücher
über 537 Zeitschriften

aus folgenden Fachgebieten:

Automobil + Motoren
Bauwesen + Immobilien
Business IT + Informatik
Elektrotechnik + Elektronik
Energie + Nachhaltigkeit
Finance + Banking
Management + Führung
Marketing + Vertrieb
Maschinenbau + Werkstoffe
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

Springer Professional "Wirtschaft"

Online-Abonnement

Mit Springer Professional "Wirtschaft" erhalten Sie Zugriff auf:

über 67.000 Bücher
über 340 Zeitschriften

aus folgenden Fachgebieten:

Bauwesen + Immobilien
Business IT + Informatik
Finance + Banking
Management + Führung
Marketing + Vertrieb
Versicherung + Risiko

Jetzt Wissensvorsprung sichern!

inform now

previous chapter Exploring Factors Influencing the Success of Equity Crowdfunding Campaigns: Findings from Italy

next chapter Financial Inclusion: Trends and Determinants

64.20; 72.20; 72.30; Telecommunication, Computer Programming and Software Service Industries; 72.40; 72.60; 73.10; Data Processing, Misc. Computer Services, R&D in Natural Sciences and Engineering; 30.01; 30.02; 32.20; 32.30; Office Equipment; Computers and other Information Processing Equipment; Television and Radio Transmitters and Apparatus for Line Telephony and Line Telegraphy; Television and Radio Receivers, Sound or Video Recording and Reproducing Apparatus; 33.20; 33.30; 33.40 Electronic Instruments and Appliances for Measuring, Checking (except Industrial Process Control); Electronic Industrial Process Control Equipment; Optical Instruments; Photographic Equipment; 24.41; 24.42; 33.10 Pharmaceutical Products and Preparations; Medical and Life Sciences Surgical Equipment and Orthopaedic Appliances; 24.16; 24.17; 31.10; Plastics and Synthetic Rubber in Primary Form; Electric Manufacturing; 31.20; 32.10; 35.30. Motors, Generators and Transformers; Electricity Distribution and Control Apparatus; Electronic Valves, Tubes and other Components; Aircraft and Spacecraft Manufacturing (Roper et al. 2009).

Agnew, J., Balduzzi, P., & Sundén, A. (2003). Portfolio Choice and Trading in a Large 401 (k) Plan. American Economic Review. https://doi.org/10.1257/000282803321455223.CrossRef

Ahlers, G. K. C., Cumming, D., Günther, C., & Schweizer, D. (2015). Signaling in Equity Crowdfunding. Entrepreneurship: Theory and Practice, 39(4), 955–980. https://doi.org/10.1111/etap.12157.CrossRef

Alsos, G. A., & Ljunggren, E. (2017). The Role of Gender in Entrepreneur–Investor Relationships: A Signaling Theory Approach. Entrepreneurship: Theory and Practice, 41(4), 567–590. https://doi.org/10.1111/etap.12226.CrossRef

Barasinska, N., & Schäfer, D. (2014). Is Crowdfunding Different? Evidence on the Relation Between Gender and Funding Success from a German Peer-to-Peer Lending Platform. German Economic Review, 15(4), 436–452. https://doi.org/10.1111/geer.12052.CrossRef

Beauhurst, Crowdfunding Index, Crowdfunding in the UK Q1 2017. https://about.beauhurst.com/research/the-deal/.

Bengtsson, O., & Hsu, D. H. (2015). Ethnic Matching in the U.S. Venture Capital Market. Journal of Business Venturing, 30(2), 338–354. https://doi.org/10.1016/j.jbusvent.2014.09.001.CrossRef

Bruin, A., Brush, C. G., & Welter, F. (2007). Advancing a Framework for Coherent Research on Women’s Entrepreneurship. Entrepreneurship: Theory and Practice. https://doi.org/10.1111/j.1540-6520.2007.00176.x.CrossRef

Brush, C. G. (1992). Research on Women Business Owners: Past Trends, a New Perspective and Future Directions. Small Business: Critical Perspectives on Business and Management. https://doi.org/10.1177/104225879201600401.CrossRef

Brush, C. G., Carter, N. M., Gatewood, E. J., Greene, P. G., & Hart, M. (2004). Gatekeepers of Venture Growth: A Diana Project Report on the Role and Participation of Women in the Venture Capital Industry. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1260385.

Charness, G., & Gneezy, U. (2012). Strong Evidence for Gender Differences in Risk Taking. Journal of Economic Behavior and Organization.https://doi.org/10.1016/j.jebo.2011.06.007.CrossRef

Collins, L., & Pierrakis, Y. (2012, July). The Venture Crowd: Crowdfunding Equity Investment into Business (pp. 1–36). Nesta.

Croson, R., & Gneezy, U. (2009). Gender Differences in Preferences. Journal of Economic Literature Journal of Economic Journal of Economie Literature.https://doi.org/10.1257/jel.47.2.448.CrossRef

Geiger, M., & Oranburg, S. C. (2018). Female Entrepreneurs and Equity Crowdfunding in the US: Receiving Less When Asking for More. Journal of Business Venturing Insights, 10, e00099.CrossRef

Gompers, P. A., Mukharlyamov, V., & Xuan, Y. (2016). The Cost of Friendship. Journal of Financial Economics, 119(3), 626–644. https://doi.org/10.1016/j.jfineco.2016.01.013.CrossRef

Gorbatai, A. D., & Nelson, L. (2017). The Narrative Advantage: Gender and the Language of Crowdfunding. UC Berkeley Working Paper. https://doi.org/10.5465/AMBPP.2015.15785abstract.CrossRef

Greenberg, J., & Mollick, E. (2015). Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding. Academy of Management Proceedings. https://doi.org/10.5465/AMBPP.2015.18365abstract.CrossRef

Harrison, R. T., & Mason, C. M. (2007). Does Gender Matter? Women Business Angels and the Supply of Entrepreneurial Finance. Entrepreneurship: Theory and Practice. https://doi.org/10.1111/j.1540-6520.2007.00182.x.CrossRef

Hegde, D., & Tumlinson, J. (2014). Does Social Proximity Enhance Business Partnerships? Theory and Evidence from Ethnicity’s Role in U.S. Venture Capital. Management Science, 60(9), 2355–2380. https://doi.org/10.1287/mnsc.2013.1878.CrossRef

Hervé, F., Manthé, E., Sannajust, A., & Schwienbacher, A. (2017). Determinants of Individual Investment Decisions in Investment-Based Crowdfunding. SSRN. https://ssrn.com/abstract=2746398 or http://dx.doi.org/10.2139/ssrn.2746398

Hochberg, Y. V., Lindsey, L. A., & Westerfield, M. M. (2015). Resource Accumulation Through Economic Ties: Evidence from Venture Capital. Journal of Financial Economics, 118(2), 245–267. https://doi.org/10.1016/j.jfineco.2015.06.008.CrossRef

Horvat, E.-A., & Papamarkou, T. (2017). Gender Differences in Equity Crowdfunding. Fifth AAAI Conference on Human Computation and Crowdsourcing.

Leitch, C., Welter, F., & Henry, C. (2018). Women Entrepreneurs’ Financing Revisited: Taking Stock and Looking Forward: New Perspectives on Women Entrepreneurs and Finance (Special Issue). Venture Capital, 20(2), 103–114. https://doi.org/10.1080/13691066.2018.1418624.CrossRef

Leland, H. E., & Pyle, D. H. (1977). Informational Asymmetries, Financial Structure, and Financial Intermediation. Journal of Finance. https://doi.org/10.2307/2329297.

Lin, T.-C., & Pursiainen, V. (2018). Gender Differences in Crowdfunding – Entrepreneur Overconfidence and Campaign Outcomes. SSRN. https://doi.org/10.2139/ssrn.3045050.

Lukkarinen, A., Teich, J. E., Wallenius, H., & Wallenius, J. (2016). Success Drivers of Online Equity Crowdfunding Campaigns. Decision Support Systems, 87, 26–38. https://doi.org/10.1016/j.dss.2016.04.006.CrossRef

Manolova, T. (2006). Enterprising Women in Transition Economies. International Small Business Journal: Researching Entrepreneurship, 24(6). https://doi.org/10.1177/0266242606069850.CrossRef

Marom, D., Robb, A., & Sade, O. (2014). Gender Dynamics in Crowdfunding (Kickstarter): Evidence on Entrepreneurs, Investors, Deals and Taste-Based Discrimination. SSRN. https://doi.org/10.2139/ssrn.2442954.

Meek, W. R., & Sullivan, D. M. (2015). Kickstarting New Businesses: Exploring the Dynamics of Gender and Crowdfunding. Diana International Research Conference, Wellesley, MA.

Mohammadi, A., & Shafi, K. (2018). Gender Differences in the Contribution Patterns of Equity-Crowdfunding Investors. Small Business Economics, 50(2), 275–287. https://doi.org/10.1007/s11187-016-9825-7.CrossRef

Mollick, E., & Robb, A. (2016). Democratizing Innovation and Capital Access: The Role of Crowdfunding. California Management Review. https://doi.org/10.1525/cmr.2016.58.2.72.CrossRef

Muravyev, A., Talavera, O., & Schäfer, D. (2009). Entrepreneurs’ Gender and Financial Constraints: Evidence from International Data. Journal of Comparative Economics. https://doi.org/10.1016/j.jce.2008.12.001.CrossRef

Polzin, F., Sanders, M., & Stavlöt, U. (2018). Do Investors and Entrepreneurs Match? – Evidence from The Netherlands and Sweden. Technological Forecasting and Social Change, 127, 112–126. https://doi.org/10.1016/j.techfore.2017.07.016.CrossRef

Roper, S., Hales, C., Bryson, J. R., & Love, J. (2009). Measuring Sectoral Innovation Capability in Nine Areas of the UK Econom. Nesta.

Ruef, M., Aldrich, H. E., & Carter, N. M. (2003). The Structure of Founding Teams: Homophily, Strong Ties, and Isolation Among U.S. Entrepreneurs. American Sociological Review, 68(2), 195. https://doi.org/10.2307/1519766.CrossRef

Sundén, A. E., & Surette, B. J. (1998). Gender Differences in the Allocation of Assets in Retirement Savings Plans. American Economic Review. https://doi.org/10.3386/w5667.

Vismara, S. (2016). Equity Retention and Social Network Theory in Equity Crowdfunding. Small Business Economics, 46(4), 579–590. https://doi.org/10.1007/s11187-016-9710-4.CrossRef

Vismara, S., Benaroio D., & Carne F. (2016). Gender in Entrepreneurial Finance: Matching Investors and Entrepreneurs in Equity Crowdfunding, Forthcoming in Albert Link, eds., Gender and Entrepreneurial Activity, Cheltenham, UK: Edward Elgar.

Title: From Seeker Side to Investor Side: Gender Dynamics in UK Equity Crowdfunding Investments
Authors: Valeria Venturelli
Alessia Pedrazzoli
Elisabetta Gualandri
Publisher: Springer International Publishing
Book: Frontier Topics in Banking
Print ISBN: 978-3-030-16294-8

Electronic ISBN: 978-3-030-16295-5

Copyright Year: 2019
DOI: https://doi.org/10.1007/978-3-030-16295-5_4