Is Equity Crowdfunding the Land of Promise for Female Entrepreneurship?

Abstract

Female entrepreneurship is lower than masculine one, with a high heterogeneity of the gender gap across industries and countries. Prior research (see Becker-Blease and Sohl, 2007; Bigelow et al., 2014; Eddleston et al., 2016) has found that female entrepreneurs are less likely to receive private equity funding, institutional capital, and bank financing. This difficult access to traditional credit sources may lead female entrepreneurs to actively seek funding from alternative channels, such as crowdfunding. By using a unique dataset of 626 equity crowdfunding campaigns, gathered from the Italian, Spanish, Finnish, and Swedish platforms over the period 2014–2019, we find that companies founded by women are more successful in receiving financial backing, both involving more investors and achieving their fundraising goal easier than male counterparts. We also examine whether the level of gender gap in the country influences this phenomenon, finding that the female advantage is stronger in countries where women are more disadvantaged and far from equal opportunities.