This research was commissioned by The National Women Business Council (NWBC) to explore the distinct relationship between crowdfunding and women entrepreneurship, and develop a deeper understanding of crowdfunding as capital source. The research aims to: i) identify and document available demographic and other descriptive quantitative information on crowdfunding, including equity crowdfunding; ii) identify gender differences in crowdfunding in terms of industry, goals, investors, platforms used, and success; iii) document existing policies that may support or hinder women’s participation in crowdfunding campaigns; iv) provide additional information and guidance to women entrepreneurs seeking to raise capital through crowdfunding; and v) provide policy recommendations for supporting women entrepreneurs. This will be carried out by synthesizing existing theoretical and empirical literature and analyzing available data on crowdfunding.
Crowdfunding is an alternative finance solution that attempts to fill the gap left by traditional financing sources, especially as it relates to small and medium enterprises (SME) financing needs. Despite the fast growth, the crowdfunding market is still in a nascent stage of development, where future policies and regulations will be shaped by the behavior and experiences of funders and entrepreneurs. As with any new market, it will be prone to distortions caused by the behavior of market participants that expose funders – or in the case of equity crowdfunding - investors to risk. This is why equitybased crowdfunding has, until recently, been the domain of accredited investors (individuals with a large net worth, who can presumably “afford” potential losses).
Future studies on the behavioral, as well as traditional economics of crowdfunding, will also play a significant role in the future of the crowdfunding market. The crowdfunding landscape will continue to evolve as legislators seek reforms aimed at addressing these issues and investor protections as the platforms themselves look to introduce mechanisms that assuage investors’ fears.
