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Judged on Their Own Merit: How Crowdfunding Removes Gender Bias From Startup Investment
It can feel like innovating is a man's game: all-women teams received only 2.2 percent of total VC investment in 2017. Women are getting turned down for investment opportunities, even though women-led, venture-backed companies offer a 35 percent higher return on equity investment and 34 percent higher total return to shareholders, per a study from Illuminate Ventures.
But the gender gap vanishes when it comes to crowdfunding. More female entrepreneurs are finding that when they cut out the middleman, their ideas and business plans can stand on their own merits, without being judged by unconscious bias. One study of 450,000 crowdfunding campaigns found that campaigns led by women were 32 percent more successful in hitting their goal than those of their male counterparts.
That's because the qualities that often get women pushed out of pitch meetings are the same ones that make them good at crowdfunding. The study found that women generally express more emotion and use more inclusive language on their campaign pages, a style that is more successful at persuading consumers to contribute money to a business.
Crowdfunding platforms like Indiegogo provide the perfect space for women to tell their stories their way, and over time this can level the playing field for women to receive funding.
"Indiegogo is committed to seeing women flourish, both on our platform and on our internal team," says Natasha Raja, vice president of marketing at Indiegogo. "That's why women make up 55 percent of the workforce at Indiegogo. We believe in the power of women as business leaders who have unique strengths in growing incredible teams, products and businesses."
Here are three groundbreaking female entrepreneurs who got their start through crowdfunding.
The first woman-owned distillery in D.C.
Childhood friends Pia Carusone and Rachel Gardner shared a longtime love of bourbon. They dreamed of opening a distillery, and in 2013, they decided to make it happen. But whiskey is a male-dominated world, and it's uncommon for women to own or operate a distillery. In fact, it had never been done before in Washington, D.C., the city where they wanted to set up shop.
"We opened [Republic Restoratives] in May 2016, so it was a three year process. In those years, we realized we needed an incredible amount of funding, and looking at how other distilleries did this, we realized we were pretty unique. Most other successful distilleries find their funding through family funding or private wealth, or they're descendants of major distilling families..." Carusone explains. "We had none of those things."
So when they tried to get funding to make their dream a reality, they were on the rocks. "We had met with a local community bank and they couldn't have been less interested. We had no credibility," Carusone says. But then an idea struck them: If they were planning to open a community-oriented distillery, then why not turn to the community for funding? "That's what led us to crowdfunding," said Carusone. "The desire to raise money from the people who are closest to us and this project, and who have an actual interest in it, and allow those people to participate."
They ran two crowdfunding campaigns to get the funding they needed—a perks-based campaign and an equity campaign, both of which opened doors to them for further funding. "After our Indiegogo perks campaign [raised over $119,000], the bank was all of a sudden interested. And traditional equity investors were interested. But we wouldn't have been interesting to either of those without the Indiegogo campaign," Carusone says.
Republic Restoratives became one of first companies to list as an equity offering on First Democracy VC, raising their maximum funding goal of $300,000 in just 57 days from 591 investors. With 25 percent of all investments stemming from the greater D.C. area, it's clear that the idea of a community distillery was solidified through the revenue share deal.
Now Pia and Rachel's distillery and craft cocktail bar is thriving on a busy corner in the heart of Washington D.C., where they were voted "Best Distillery in D.C." by a reader's poll in the Washington Post and boast a 4.5-star Yelp rating.
The innovation that protects your stuff and your peace of mind.
Focus is one of the most important things we can cultivate, whether it's on our friends, families, or work. But it's hard to stay focused if you're constantly worried about watching your stuff. That was the problem founder and CEO Elin Elkehag wanted to solve when she invented the Stilla Motion, a portable burglar alarm that you can take with you wherever you go, and use for whatever you like.
From the get-go, Elkehag had big ambitions. She gave herself a 100-day deadline to create the business completely from scratch while she still had a day job—and had a working prototype by the end of that time. "It was really hard, but with grit and perseverance, and 27 prototypes made by hand in clay and paint at my mom's kitchen table, I made it from an idea to a patent pending working hardware prototype and a registered Delaware inc. in 100 days," Elkehag says.
When they launched their Indiegogo campaign, they had instantaneous success, giving her proof of concept, an audience, and—most importantly—a thriving business. "We reached our goal in 10 hours. I have paying customers in 53 countries and since then we've launched in AT&T's flagship store."
The first women's magazine that refuses to retouch women's bodies.
The concept behind Darling magazine shouldn't be groundbreaking, but unfortunately it is: A women's magazine that refuses to retouch women's skin or bodies. It's been well-documented that photoshop has a toxic effect on body image, and until now, no women's media had completely refused to take part in it.
But Sarah Dubbledam wanted to create something that empowered women through and through. And it's worked: Darling has thrived thanks to their extensive fan community, who was hungry for content that empowers women and challenges cultural expectations that confine them. Darling took the strength of their community even farther when launching an equity campaign with Indiegogo. They invited their community to invest in their growth, and as a result, raised more than $400,000 to help them expand to the next stage.
"When I started Darling, I was 25 and didn't have any money or resources to start a business, so I turned to crowdfunding—and that's how Darling was born!" says Dubbledam, founder and CEO. "Five years later, Darling is an influential platform, and now seeking to expand. Our audience has made Darling; they are the reason we exist, so I know they want to see us succeed and grow—which is why we've now turned to them to launch us into a new season of growth with Darling!"
Being able to share their success with the readers who rely on Darling for inspiration creates a true collaboration that wouldn't have been possible without equity crowdfunding.
Innovation for all.
Good ideas should be allowed to come to fruition, regardless of who thought of them. Crowdfunding lets entrepreneurs go directly to potential customers to test out their ideas and build a business. Women thrive when they're given the space to create and innovate without being judged on their gender, which is exactly why so many amazing projects by women are being funded through crowdfunding.
"We want to support a world with more inventiveness, more breakthroughs, and more groundbreaking spaces for our communities," says Raja. "At Indiegogo, we believe great ideas shouldn't have a gender."