Would you back a man or a woman pitching a business idea on Dragon's Den? A new study by the University of Portsmouth suggests that, when it comes to potential crowdfunding investors, the answer may depend less on who is pitching and more on what they are selling.
Researchers surveyed 4,500 members of the UK public to explore what might influence their decisions if they were considering investing in a business through equity crowdfunding; where people buy a stake in a company in return for their money.
The researchers expected women to be more likely to support businesses led by other women, as previous studies have suggested that investors often favour entrepreneurs of their own gender. But the results surprised them, as the founder's gender did not emerge as the deciding factor.
Instead, the type of business was more influential. Women were more attracted to healthcare businesses, while men showed a stronger preference for financial technology (fintech).
We expected to find that women would be more likely to invest in businesses led by other women, but that wasn't what the results showed. The type of business appeared to matter more than the gender of the person running it.
Dr Federica Alberti, School of Accounting, Economics and Finance, University of Portsmouth
Dr Federica Alberti , from the School of Accounting, Economics and Finance, University of Portsmouth, said: "We expected to find that women would be more likely to invest in businesses led by other women, but that wasn't what the results showed. The type of business appeared to matter more than the gender of the person running it."
Women entrepreneurs around the world have historically faced difficulties securing finance through traditional routes such as bank loans and venture capital. Equity crowdfunding offers an alternative, allowing businesses to seek investment directly from members of the public.
The researchers wanted to explore whether this more open approach might help women overcome some of these barriers. Their findings suggest that, in the hypothetical investment decisions examined, the nature of the business was more influential than the founder's gender.
Healthcare businesses may appeal to women because of their association with care and social benefit, while fintech may appeal more strongly to men. These are possible explanations for the findings, rather than proof that all women and men share the same preferences.
Professor Karen Johnston , from the School of Organisations, Systems and People , University of Portsmouth, said: "Crowdfunding gives people the opportunity to support businesses they believe in. Understanding what attracts different investors could help entrepreneurs think about how they present their ideas and reach potential backers."
Crowdfunding gives people the opportunity to support businesses they believe in. Understanding what attracts different investors could help entrepreneurs think about how they present their ideas and reach potential backers.
Professor Karen Johnston, School of Organisations, Systems and People, University of Portsmouth
The researchers stress that the study captures how members of the public said they would respond to hypothetical investment opportunities. It does not establish whether people would make the same choices when investing their own money or whether the findings reflect actual crowdfunding outcomes.
However, the results offer a new theory on how people assess business opportunities and the factors that may influence their willingness to invest.
