What drives a crowdfunding investment decision?
When people consider investing in a young company through equity crowdfunding, the business itself may matter more than the gender of the person presenting it. That is the central finding of a University of Portsmouth study that surveyed 4,500 members of the UK public about the factors that could influence hypothetical investment choices.
The research, published in the British Journal of Management, examined a question with implications for entrepreneurs seeking alternatives to bank lending and venture capital. Equity crowdfunding allows members of the public to buy a stake in a business in exchange for their money. It is often seen as a more open route to finance than traditional channels, where women entrepreneurs have historically faced barriers.
The researchers expected women to be more likely to support businesses led by women, reflecting earlier research suggesting that investors can favor entrepreneurs of their own gender. But founder gender did not emerge as the deciding factor in this survey experiment. The type of business was more influential.
Health care and fintech drew different preferences
Women in the study showed greater interest in health-care businesses, while men showed a stronger preference for financial technology, or fintech. The researchers describe these as patterns in the hypothetical choices they measured, not as evidence that every woman or man will make the same investment decision.
Dr. Federica Alberti of the University of Portsmouth’s School of Accounting, Economics and Finance said the team had expected to find a stronger tendency for women to invest in women-led businesses. Instead, the study indicated that the nature of the business carried more weight than the gender of the entrepreneur running it.
The researchers suggest that health-care ventures may appeal to women because of their association with care and social benefit, while fintech may appeal more strongly to men. Those are possible interpretations of the result rather than proof of fixed preferences.
An alternative route, but not a complete answer
Women entrepreneurs around the world have faced persistent challenges in securing finance through conventional routes such as bank loans and venture capital. Equity crowdfunding can broaden the pool of potential backers by letting businesses seek funding directly from the public.
The Portsmouth findings offer a measured view of what that openness may mean. In the hypothetical decisions examined, the founder’s gender was not the main factor. That could suggest that a crowdfunding setting does not simply reproduce every form of gender-based preference found in other financing environments. Yet it does not mean funding inequality has disappeared, nor does it show how every real campaign will perform.
Actual crowdfunding outcomes can involve many variables beyond a founder’s identity and a company’s sector, including the quality of a pitch, information provided to potential investors, the size of the funding target and the audience reached by a campaign. The supplied study focuses on survey responses from members of the UK public considering hypothetical equity-crowdfunding investments.
Sector positioning may be central to investor appeal
For founders and platforms, the research emphasizes the importance of how a company’s activity is understood by potential investors. If business type has a stronger influence than leader gender in this setting, then the perceived purpose and sector of a venture may deserve particular attention in campaign design and investor communication.
That does not reduce entrepreneurship to a marketing category. Rather, it highlights a practical feature of public investment decisions: potential backers may first respond to what a business is trying to do. Health-care and fintech companies can evoke different expectations about social benefit, risk, technology and financial opportunity, and those expectations may shape interest before investors reach questions about the founder.
The study also cautions against relying on assumptions about who will support whom. The researchers’ expectation of same-gender preference was not borne out in their results. In this sample, the sector appeared more consequential than the founder’s gender.
What the findings do and do not show
The survey provides evidence about stated preferences in a large UK sample, not a guarantee of investment behavior in live markets. It also does not establish that gender never affects access to capital. The study instead narrows the question: when respondents were asked about hypothetical equity-crowdfunding investments, business type was more influential than founder gender.
That distinction is useful for a debate often framed in broad terms. Crowdfunding may offer one channel through which entrepreneurs can reach prospective investors directly, but its effects on access to finance will depend on the details of campaigns and the decisions of actual investors. The Portsmouth research suggests that, at least in the choices it tested, what a company sells or provides may matter more than who is leading it.
This article is based on reporting by Phys.org. Read the original article.
Originally published on phys.org
