Could crowdfunding help close starting fund-ups gender pay gap? New research

Gender alone has little impact on crowdfunding decisions, with factors such as business type, investor experience and expected returns playing a much larger role in shaping investment choices. This is according to new research by Dr Xing Huang, and colleagues from the University of Portsmouth.

Crowdfunding: a better route to funding for women?

Women entrepreneurs often face barriers when seeking finance through traditional routes, but this study suggests that crowdfunding may offer a more level playing field, with investors focusing more on the nature of a business and its financial prospects than the entrepreneur's gender.

Published in the British Journal of Management, the study surveyed 4,510 members of the public through Prolific, asking them to evaluate hypothetical crowdfunding opportunities in either healthcare or fintech businesses. The study varied the gender of the entrepreneur and the level of financial return offered to investors to investigate what factors influence support for a business venture.

The findings showed only limited evidence that investors preferred entrepreneurs of their own gender. Instead, investment decisions were shaped more strongly by the type of business, the expected financial return, and the experience of the investor.

Men invest in finance, women invest in healthcare

Women participants consistently rated healthcare ventures more favourably than fintech businesses, while men were generally more attracted to ventures offering higher returns and to fintech opportunities than women. The researchers suggest this may reflect what they describe as "gender value homophily" - the tendency for individuals to favour ventures that align with values they associate with their own experiences and interests, rather than simply supporting entrepreneurs who share their gender.

The study also found that investor experience matters. People with previous crowdfunding experience were less influenced by gender-related cues and appeared to make decisions based on more objective assessments of business potential. By contrast, less experienced investors were more likely to rely on simple signals when evaluating opportunities.

Another notable finding was that women were generally more cautious about the amounts they were willing to invest, while men were more likely to support ventures offering higher financial returns. According to the researchers, this suggests that risk preferences may influence crowdfunding behaviour more than gender bias alone.

Commenting on the findings, Dr Xing Huang, Lecturer in Accounting at Henley Business School, said:

We often think that women entrepreneurs need more women investors to overcome gender barriers in finance. But our research shows it’s not that simple. It’s not just about women backing women or men backing men.

What really matters is whether investors connect with the business — what it does, what it stands for and what it can offer them.

For women entrepreneurs, this is encouraging. It suggests that getting funding may be less about their gender and more about finding investors who see the value in their business. And crowdfunding could help make that happen.

The researchers say the findings provide a more nuanced understanding of how crowdfunding investors evaluate opportunities and suggest that as equity crowdfunding continues to grow, investor experience may play an increasingly important role in reducing the influence of stereotypes and assumptions in funding decisions

To speak with Dr Xing Huang or any of our academic experts, please contact pr@henley.ac.uk.