Language has a massive impact on how successful a crowdfunding bid is and women use it better, study finds. It perhaps won’t surprise you to hear that 85% of venture-backed businesses are led by men. But on Indiegogo around 47% of campaigns that reach their funding target are run…
Language has a massive impact on how successful a crowdfunding bid is and women use it better, study finds.
It perhaps won’t surprise you to hear that 85% of venture-backed businesses are led by men. But on Indiegogo around 47% of campaigns that reach their funding target are run by women.
Does this mean women are better at crowdfunding? And if so why?
One group of researchers however, say that the answer lies in our language: The way women write their pitches might simply makes them better crowdfunders, a study by the US Berkeley and Hass School of Business has found.
Women lead when it comes to language
Women succeed at crowdfunding because they focus less on business terms around money and finance, and instead prioritise expressing traits like positive emotion, descriptive vividness and inclusiveness.
The independent study, titled “The Narrative Advantage: Gender and the Language of Crowdfunding,” referenced data collected from 9,000 Indiegogo campaigns between 2010 and 2013.
People support crowdfunding campaigns for four key reasons, says Ringelmann, co-founder at Indiegogo: because they want to support the people behind the campaign; because they love the project; because they want to become a part of the project; or because they want to recive backers’ perks.
“Given these motivations, of which three are more impact and emotion-driven in nature, it’s not surprising that campaigns with vivid language and positive emotion do better,” she told The Memo.
Campaigns run by teams and campaigns that update their page regularly also tend to raise more money, she adds:
“From this, we infer that the more collaborative the campaigners are in how they involve their team and community, the more successful they are at raising funds.”
“Assuming “inclusive” behaviour goes hand in hand with “inclusive” language, the research’s finding around the value of inclusive language make sense.”
Should we be surprised that women excel at these traits?
It might seem clichéd to wrap up women’s talents in emotional intelligence, but perhaps this is exactly what stands in the way of – and stunts – many male-dominated businesses.
“It’s not surprising,” says Ringelmann of the findings. “Crowdfunding pitches rely heavily on the written word in opposition to other types of business pitches.”
“Overall, woman generally express more emotion and write more about relationships, a style that is more successful than typical male writing at persuading online readers to fund their projects.”
“On Indiegogo over 47% of campaigns that reach their funding goals are run by women. To put this into perspective, this number is nearly 4 times higher than the number of female-owned businesses that receive venture capital.”
Just some successful campaigns run by women include this Jibo ‘social robot’ campaign (which raised $3.7m), this Muse Brain Wave Sensing Headband campaign, and these Axent wear car ear headphones (which raised over $3.4m dollars).
An avenue of hope?
Given that leaders like Martha Lane Fox are still tackling an unconscious bias in the board room (which sees white male investors back other white male-lead businesses), could crowdfunding offer female entrepreneurs an avenue of hope?
“Crowdfunding is democratising access to entrepreneurship and capital and ensuring that women are on a completely level playing field with men,” said Ringelmann.
“It has removed bias from the funding equation by creating an equal opportunity platform where all ideas are welcome, and where all ideas succeed based on their merit and market: It has put the power back into the hands of the people to decide which ideas should come to life, by allowing people to exercise that power by voting with their dollar.”
No simple answer
Of course, when it comes to business, it’s never black and white. The stats which suggest women are inherently better crowdfunders could, for example, be skewed by the very fact that women still face bias when it comes to seeking investment through typical investment routes.
This could result in a greater number of high quality female-founded businesses being forced turn to crowdfunding.
Still, the study should give businesses across the board food for thought. A greater emphasis on upbeat motion, descriptive language and inclusivity, could help them connect with potential backers in a much more meaningful, and money-smart, way.
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