A new study shows that crowdfunding websites are helping women break the glass ceiling in the technology industry. Women represent only 20% of tech founders in noted tech accelerator Y Combinator and only about 17% of engineers at the top tech firms. Yet they are behind about 65% of successful Kickstarter projects.
NYU’s Jason Greenberg and University of Pennsylvania’s Ethan Mollick found that the extraordinary success of women on Kickstarter was partly due to activist women backers who have “the motivation to help someone that shares one’s gender overcome perceived structural barriers..
Indeed, some of the most successful crowdfunding projects were created by women to empower women. For instance, one project, the “Miss Possible” doll collection of Barbie-like dolls that have careers in science and business raised over $85,000 (pictured above).
The research team found that women-only teams had twice as many female backers as men-only or mixed-gender teams.
In a follow-up experiment to understand the correlation between gender and crowdfunding, the team found that women with an “activist” orientation were also more likely to support women-created projects.
Danae Ringelmann, co-founder of crowdfunding site Indiegogo, told me that the Internet helps backers overcome the old barriers that prevented women from getting funding. When investors are part of a small group of backers, they tend to side with historical trends, perpetuating male-backed projects because that’s what has been most successful.
“Funders started saying no more than they would say yes. What they did say yes on was based on assumptions and biases. All humans have biases, but when traditional funders are historically similar in background and community, they are more likely to assume more biases,” she wrote to me.
From this perspective, it’s unknown whether “activist” women backers would still be as willing to back a project if it cost them over $10,000. But there’s not much risk in giving $10 or even $100 to support a cause.
This could be very good news for the future of bigger tech projects when startup crowdfunding is eventually legalized. To date, only accredited investors can give money to startups. Congress passed the JOBS Act to reduce limits on crowdfunding business, but it has hit a snag at the Security and Exchange Commission.
Regulators worry about uninformed amateurs losing their savings and are mulling restrictions before the act is implemented. It may be a few years before the government figures out a practical way to allow mass funding of tech startups.
But if the success of Kickstarter and Indiegogo are any indication, crowdfunding could be very good for gender diversity in Silicon Valley.