Despite the advent of equity crowdfunding increased democratization and access to capital resources and contributed to the financing of sustainable projects, there is puzzling evidence that women are less likely to invest in equity offers on the Internet. A recent study highlights the determinants of women participating in equity crowdfunding campaigns.

Equity crowdfunding is a form of financing in which people acquire shares in a company in exchange for invested capital using collective platforms. Despite the sound contribution that equity crowdfunding is potentially bringing to the achievement of global sustainable targets, there is one unsolved issue that characterizes this industry around the world: the scarce participation of women investors in the proposed projects. Equity crowdfunding platforms redefine the technology-people relationship, supporting a sustainable digital transition that accelerates women’s empowerment as leaders and investors.

The study tests four specific hypotheses related to the factors attracting investments from women in equity crowdfunding. Firstly, there is a hypothesis that women-owned businesses are more likely to be attractive to women investors. Secondly, it is conjectured that potential female investors pay more attention to sustainability issues, compared to men. Thirdly, it is hypothesized that the participation of women in equity crowdfunding investments is more likely if the minimum ticket is smaller. Lastly, it is tested that women are relatively less attracted by follow-on campaigns.

The article “Gender disparity in the participation to equity crowdfunding campaigns” by Claudio Bonvino, Andrea Odille Bosio, and Giancarlo Giudici from the POLIMI School of Management at Politecnico di Milano, published as part of the special issue “Crowdfunding campaigns for a sustainable development” in the journal Finance Research Letters, investigates the determinants that in equity crowdfunding are associated with a larger (or lower) participation of women.

Searches are based on a proprietary database comprising all equity crowdfunding campaigns published by Italian platforms from 2014 to 2023.

The findings highlight

• Women are less likely to invest in equity crowdfunding campaigns.
• Female investors are more likely to finance projects proposed by women.
• Women pay attention to sustainability in deciding whether to invest or not.
• Less women fund the project when the minimum investment chip is larger.
• Women are relatively less represented in follow-on campaigns.

The engagement of women is still far from being fully exploited in equity crowdfunding, despite this funding channel being deemed by the literature to be potentially more inclusive and sustainability-oriented compared to traditional sources of finance.

For more detail: https://authors.elsevier.com/c/1kPiU5VD4KyeER