Maastricht University’s new study reveals women are one step ahead in corporate crowdfunding than men. To run their businesses, women receive financial assistance in crowdfunding more easily from corporates in comparison to banks.

The race of becoming successful business leaders is not only confined to men these days. Women are also playing a significant role in this race and coming ahead in numerous sectors. Globally, women have been contributing towards the realm of business equivalent to men.

The most challenging aspect of starting or running a business is funding, whether its for men or women. Finance is the most crucial part of any business. Considering several types of financing like Bank loans, angel investors, venture capitalists, crowdsourcing, etc, founders and owners can take help from various sources to scale their businesses.

There are quite a few women-led businesses like The Wonderful Co. by Lynda Resnick; Panda Restaurant Group by Peggy Cherng; ActOne Group Inc. by Janice Bryant Howroyd amongst others, that have proven to be the master of all. These women founders have conquered the financing game and excelled in running a business having their partners alongside.

Women doing better in Crowdfunding  

After the release of a new study by Maastricht University, it has been made clear that corporate crowdfunding (borrowing funding from the general public) works better for women as compared to men.

The researchers of the study have analyzed campaigns totalling of 934 on 3 Dutch financing sites that involves 1,500 to 150,000 amounts. Those financing sites includes entrepreneurs in the development sector (1^st), business loans in a general sense (2^nd) and both, private and business loans (3^rd), where evidently, women did a better job in all three.

As per the previous researches, as compared to men, women get just as good conditions in crowdfunding for private loans while through traditional financial institutions, they often get fewer good conditions, exemplifying better growth opportunities for them.

Taking notes from the new study, it is evident that women implementing corporate crowdfunding can conclude their campaigns swiftly without compromising on their conditions such as paying higher rates to the investors.

Researcher’s Outlook

Researchers have claimed that women are performing better when it comes to corporate crowdfunding and its turning into their favour as well. In addition, Pomme Theunissen, the lead researcher of the study said, “Discrimination against women in the financial world is a well-known phenomenon. They get credit less often, and when they do get it, they often have to pay higher interest rates and provide more guarantees. They get a worse deal, and banks get away with it.”

Continuing the statement, Pomme said that women more than average leave a bank without getting successful outcome as a result and they start looking for alternatives. He added, “More and more women realize that crowdfunding can be interesting for them. It is not massive yet, but it’s emerging more and more. If women get a worse deal from the bank, you get relatively more good women on crowdfunding platforms.”

As men get better deals from banks and women on the other hand, get challenges in getting funds, they prefer going for the other option which is most probably, crowdfunding. The effect might become additionally intensify by the herd behaviour of investors. Moreover, the crowdfunding campaigns gets over rapidly, having some to last for few days and other for few seconds.

Furthermore, Pomme stated, “Then you have to choose very quickly. If you don’t have that much self-confidence, you tend to go for a campaign that is almost full. That must be good, investors think. And you see that effect more strongly in plans by female entrepreneurs.”

In the year 2022, the market of crowdfunding amounted for around 1 billion euros, as per the lead researcher.

Conclusion

In addition to this study, they are also studying women entrepreneurs who also plays a role of a mother, entitling it as ‘mompreneurs’. Pomme claims that the results indicate towards mothers being more likely to venture into the field of entrepreneurship and start their own businesses only if they draw some extra time, pointing for more extensive parental leave.

He says, “In Germany, the number of enterprising mothers fell when parental leave was shortened,” Theunissen said. “More time and peace gives a greater chance of entrepreneurship.”

In conclusion, the recent study on corporate crowdfunding by Maastricht University, women are performing much better than men in those platforms where they are getting good conditions and it is helping them to scale their business, considering several factors.