BUSINESS REPORTER –
MUSCAT, JULY 24 –
PwC and The Crowdfunding Centre launched their joint report, Women Unbound: Unleashing female entrepreneurial potential, which explores the experience of women in achieving finance raising success through seed crowdfunding compared with more traditional finance raising routes.
The report findings, which are based on two full years of seed crowdfunding data (2015-16) tracked by The Crowdfunding Centre, include the results of over 465,000 seed crowdfunding campaigns — from nine of the largest crowdfunding platforms globally.
The report finds that while men clearly use seed crowdfunding more than women, women are more successful at crowdfunding than men. Globally, seventeen per cent of male-led campaigns reach their finance target, compared with 22 per cent of female-led campaigns. Overall campaigns led by women were 32 per cent more successful at reaching their funding target than those led by men across a wide range of sectors, geography and cultures.
Evolution of seed crowdfunding
Crowdfunding is a disruptive innovation which has provided new routes to funding for individuals, startups and growth businesses. It enables them to engage and interact directly with the market and with thousands of backers, supporters, customers and potential partners like never before. Seed crowdfunding is the use of ‘rewards based’ crowdfunding platforms to fund the creation, launch or development of new businesses, products and services where backers pay upfront for a product, service or project. Since its inception, seed crowdfunding’s footprint has continued to spread with the levels of finance raised through the nine platforms analysed in this report jumping from $10 million in 2009 to over $767 million in 2016, with backers from over 200 countries.
Women-led campaigns performed better in terms of securing their funding goals than campaigns led by men when we segregate the data for every sector and every country. In countries with the largest volumes of seed crowdfunding, the UK and the US, 20 per cent of male-led campaigns reached their targets. Yet female-led campaigns outperformed, with 24 per cent of women in the US and 26 per cent of women in the UK successfully reaching their campaign funding target.
This trend continues in countries where seed crowdfunding is not yet as wide-scale or successful. For example, 10 per cent of female-led campaigns in the Middle East were successful compared with 4 per cent of male. That number mirrors trends in E7 countries (China, India, Brazil, Mexico, Russia, Indonesia and Turkey), where 10 per cent of female-led campaigns also reached their goals compared to 4 per cent of male-led campaigns.
Even in what some consider to be more masculine sectors, for example technology, where we globally see nine male seed crowdfunders for technology ventures to every one female crowdfunder, 13 per cent of women were successful in achieving their funding goal compared to just 10 per cent of men. Similarly, in the digital technology sector, where there are three male-led campaigns to every one female-led, women achieved a 16 per cent success rate compared to just 9 per cent for men.
Seed crowdfunding in Mideast
This analysis shows a total of 97 campaigns were successfully funded in the region in 2015 and 2016, 24 of which were female-led and 73 male-led. And while the number of campaigns funded in the region is still relatively low vis-a-vis more established territories, it is important to highlight that seed crowdfunding is still relatively new to the region.
Equally important to highlight is that in the Middle East, average pledge amounts to female-led campaigns are 29 per cent higher than male-led campaigns, compared with a difference of only 5 per cent globally.
Meanwhile globally, 72 per cent of crowdfunders are male to 28 per cent female, while in the Middle East 83 per cent of crowdfunders are male to 17 per cent female. It was also revealed that women in the Middle East do better than their male counterparts in achieving their finance goals through seed crowdfunding (10 per cent vs 6 per cent respectively). The findings indicate that seed crowdfunding generated a total financing of $ 3,251,112 (with $ 527,300 going to female led campaigns) in the Middle East for 2015 and 2016, with female-led campaigns in the Middle East generating an estimated 5,320 backers, compared with 4,240 for those that were male-led.
Co-founder and CEO of The Crowdfunding Centre, Barry E James says: “Who could have expected that when the middle-men are removed from the equation, and women and men entrepreneurs get equal and direct access to the market, it would turn out that women would, immediately and decisively, outperform the men, across the board? Shining a new light on the endemic imbalance and the causes that have long fuelled limited access to finance for female entrepreneurs via traditional financing routes.
“That only half as many women currently embark on a crowdfunding campaign is undoubtedly a reflection of low expectations stemming from the same roots. So, in that light, it’s time to readjust not just our expectation and perceptions but our attitudes, institutions, behaviours — and the way we make decisions.”