Equity crowdfunding was supposed to level the playing field. By allowing anyone – not just accredited investors – to invest in startups, the JOBS Act promised to democratize access to capital. Some scholars went further, arguing that crowdfunding would specifically help underrepresented groups, including women entrepreneurs, by reducing the gatekeeping power of a venture capital industry that is overwhelmingly male.

The data tells a different story. In Female Entrepreneurs and Equity Crowdfunding in the US: Receiving Less When Asking for More, published in the Journal of Business Venturing Insights, Mark Geiger and I present the first empirical study of gender and funding in the population of U.S. equity crowdfunding campaigns. Our findings challenge the optimistic narrative directly.

The numbers

Female-led equity crowdfunding campaigns receive significantly less funding than male-led campaigns. The average amount raised by campaigns with a female primary signatory was $152,918, compared to $258,098 for campaigns with a male primary signatory. That is a gap of more than $100,000 – roughly 41 percent less.

But the headline finding is not the gap itself. It is what happens as ambition increases. The gender gap widens as the target funding amount goes up. For small campaigns, the difference between male-led and female-led outcomes is modest. For larger campaigns – precisely the ones that could build scalable businesses – the disparity becomes pronounced.

Campaigns raise significantly less funding, as the target amount increases, when the primary signatory is female.

This is the opposite of what crowdfunding advocates predicted. If crowdfunding truly democratized access to capital, you would expect the platform to be gender-neutral, or even to favor women (since the crowd might be more diverse than the venture capital establishment). Instead, equity crowdfunding appears to reproduce – and in some cases amplify – the same patterns found in traditional venture finance.

Why equity crowdfunding is different from Kickstarter

Previous research on crowdfunding and gender has produced mixed results, but the optimistic findings come almost entirely from rewards-based platforms like Kickstarter. On Kickstarter, women entrepreneurs have been found to perform as well as or better than men in meeting funding targets.

Mark Geiger and I argue that equity crowdfunding is a fundamentally different context. On Kickstarter, backers are making relatively small contributions in exchange for a product or experience. The decision is closer to a purchase than an investment. On equity crowdfunding platforms, contributors are buying a profit interest in a company. They are making investment decisions, evaluating business models, assessing growth potential, and calculating risk-adjusted returns.

This distinction matters because the biases that affect investment decisions may differ from those that affect purchasing decisions. Research on venture capital consistently shows that investors evaluate male and female founders differently – asking men “promotion” questions about growth and opportunity while asking women “prevention” questions about risk and downside. If equity crowdfunding investors exhibit similar patterns, the platform will not correct the biases of traditional finance. It will replicate them.

What the data covers

The study examines the population – not just a sample – of U.S. equity crowdfunding campaigns. This is possible because equity crowdfunding was legalized so recently (May 16, 2016) that the total number of campaigns at the time of the study was manageable. The data comes from SEC filings, which are public records, ensuring completeness.

The primary signatory of a crowdfunding campaign is the individual who signs the SEC filing – typically the CEO or founder. We use this as our measure of gender, which has the advantage of being objective and verifiable rather than relying on self-reporting or researcher coding.

The structural problem

The findings point to a structural issue that policy alone cannot fix. The JOBS Act removed legal barriers to startup investing by non-accredited investors. But removing legal barriers does not eliminate the cognitive biases, social networks, and cultural assumptions that channel capital toward male-led ventures.

Consider the mechanics. Equity crowdfunding campaigns rely heavily on social media and personal networks for initial momentum. If women’s professional networks are smaller or less investment-oriented – a well-documented phenomenon in entrepreneurship research – their campaigns start with a structural disadvantage. The crowd then responds to social proof: campaigns with early traction attract more investment, and campaigns without it stall. A small initial gap can compound into a large outcome gap.

There is also the question of what “asking for more” signals to different audiences. When a male founder sets an ambitious funding target, investors may read confidence and vision. When a female founder does the same, the study’s results suggest the crowd responds less favorably – and the penalty increases with the size of the ask.

What this means for the crowdfunding debate

The policy implications are uncomfortable. Crowdfunding was sold partly on its democratizing potential – the idea that removing accredited-investor requirements and allowing ordinary people to invest would diversify who gets funded. Our research suggests this was naive.

If equity crowdfunding reproduces the gender biases of traditional venture capital, then the platform is not a solution to funding inequality. It is an expansion of the same system to a larger investor base. More people making biased decisions does not produce less bias. It may produce more.

This does not mean equity crowdfunding is without value. But it means that anyone designing crowdfunding policy or platforms should be realistic about what the technology can and cannot accomplish. Technology can lower transaction costs and expand access. It cannot, by itself, change the patterns of human judgment that determine who gets funded.

If you are a female entrepreneur considering equity crowdfunding, the data suggests you should be prepared for a steeper climb – especially if your capital needs are large. And if you are a platform designer or regulator, the question is whether structural interventions (such as blind review processes or algorithmic bias correction) could help crowdfunding deliver on its original promise.

The crowd is not a neutral allocator of capital. Understanding why is the first step toward building one that could be.

Read the full article: Mark Geiger & Seth C. Oranburg, Female Entrepreneurs and Equity Crowdfunding in the US: Receiving Less When Asking for More, 10 J. Bus. Venturing Insights (2018).