Women are winners when it comes to crowdfunding

Research conducted in part by a Berkeley-Haas School of Business professor shows that women in the business world may struggle to keep up with their male counterparts when it comes to jobs and financing, but come out ahead with crowdfunding.

Andreea Gorbatai, an assistant professor with Haas’s Management of Organizations Group, and Laura Nelson of Northwestern University’s Kellogg School of Management, have produced a working paper, “The Narrative Advantage: Gender and the Language of Crowdfunding,” that takes the position that women are better at telling a story that resonates with potential investors in the crowdfunding arena.

The two contend that differences in male and female language patterns partly explain this advantage, and they ested their theories by looking at almost 9,000 small business and technology fundraising campaigns on the crowdfunding website, Indiegogo.

“Online fundraising settings pose an interesting empirical puzzle: women are systematically more successful than men, an outcome contrary to offline gender inequality,” write the two professors. ” We propose that this outcome is partially explained by linguistic differences between men and women in terms of language they use, and … results support our theory, suggesting a link between micro-level linguistic choices and macro level outcomes: the institution of crowdfunding may reduce gender inequalities in the fundraising arena by benefitting the communication style of women.”

They go on to conclude that online environments may mitigate interactional gender categorization because the virtual environment allows participants independence from their physical persona and can downplay the prominence of gender.

Read more about their work on Berkeley-Haas’s research news site.