How crowdfunding is getting women into boardrooms
Serial entrepreneur William Berry hails the 'democratising effect' of crowdfunding and argues it has changed the landscape for female entrepreneurs
Crowdfunding has been instrumental in growing and supporting British business but it is also having another very welcome effect; it’s increasing the number of women making the entrepreneurial leap.
Getting more women into boardrooms has been a key area for the current government and while the figures have increased in recent years only 20% of directors employed in FTSE 100 companies are female.
Cracking the boys-club mentality of large businesses takes time and it is clearly not moving in the right direction quickly enough but instead of accepting the glass ceiling exists, women are making their mark in business in other ways.
Research by the Crowdfunding Centre revealed 40% of all campaigns that reached their goal were led by women, which is a far higher rate than is typically found in venture capital projects or angel financing projects.
Data from the US also suggests that women are also more likely to raise more money and receive a greater number of contributions than their male counterparts.
Crowdfunding and the rise of female investors
And on the flip side, women are also more likely to invest money through a crowdfunding platform than men – with US site BloomVC reporting 64% of the total offers of cash on its crowdfunding platform come from women and furthermore 78% of the money from women go towards supporting female-run businesses.
This is superb news and proves just how revolutionary crowdfunding can be for British entrepreneurs. It has broken down the traditional barriers to entry that have existed in business and allowed those with small budgets but big ideas to realise their dreams.
This is particularly true in the competitive arena of raising funds. Interesting research from MIT Sloan School of Management and Harvard Business School found that men are 40% more likely to get venture-capital funding with the same pitch as women.
However, this bias doesn’t exist in crowdfunding meaning it is far easier for women to equal or better their male counterparts in the entrepreneurial stakes. It is unfortunate – and a sign of how far we have yet to come – that the bias does exist but thankfully there is a way to level the playing field now.
Venture capital is also more typically associated with tech start-ups than other types of retail or entertainment business meaning it can be difficult to find the right people to pitch to and often the entrepreneur has worked outside of the venture capital space. There are few people that operate in or would have access to venture capital at all.
Breaking the glass ceiling as CEO from day one
For most people, male or female, who have a business idea, crowdfunding is a great way to see how the market takes to your idea and allows you to test the water as well as build up confidence before looking for venture capital or other types of financing.
The fact is that crowdfunding is democratising business start-ups and entrepreneurship for everyone and in doing so it is putting women on a fair footing with men, rather than locking them out of business as is too readily the case in many industries.
The government has called for 25% of women on FTSE 100 boards to be female but there has been a quiet revolution of female entrepreneurs working away in the background to create their own futures and grow their own businesses, as chief executive from day one.
The days of the boys-club may sadly not be over just yet but it is fair to say that instead of letting the archaic mentality of many industries stop them, women are using technology and new funding methods to create their own networks and break through the glass ceiling.
William Berry is a serial entrepreneur and in 2006 was named a Young Gun by Growing Business. He is the founder-director of accommodationforstudents.com, and Vincentbond.com. William is also CEO of the new video start up p6.com, based in California.