Show Her The Money: Why Successful Business Women Are Better at Crowdfunding Than Men
The most successful campaigns on Indiegogo used positive emotion and inclusive language.
Project, Passion, Participation and Perk. These are the motivating factors for funders choosing to back a startup, according to Danae Ringelmann, Indiegogo founder, writing in Elle.
An investor is looking to connect to the product or service on one, many or all of those pillars. And emotional reasons score big. Which is why successful business women are better at it than men are, research shows.
Ringelmann, the woman responsible for fueling many great ideas with big money, says a new study from University of California at Berkley’s Haas School of Business shows that women are better than men at crowdfunding.
The reasons for successful business women scoring funding are about emotional intelligence and expressiveness.
“The researcher found that women were more likely to express positive emotion, vividness, and inclusiveness, and less likely to use business language. Comparing these factors to success, she found that the most successful campaigns on Indiegogo used positive emotion and inclusive language and those that fell short relied on dry, business language,” Ringelmann writes.
“The researcher concluded that since women are better at expressing more positive emotion and using inclusive language than men, backers may be more likely to fund their projects.”
Citing the same study, plus more research, Geri Stengel writing in Forbes, agrees and adds that authenticity and good storytelling help women communicate about their ideas in a way that can entice funders and convince them to move ahead with financial backing. In other words, successful business women can move people to their side or their team more easily.
“Crowdfunding works for gadgets, films, food products, fashion and even Main Street companies, such as bakeries and cafes, among other things. Campaigns big and small run by women thrive on crowdfunding platforms,” Stengel writes.
And while more women entrepreneurs may be better at the pitch and follow through than some men, it is not a sure thing.
“Success in crowdfunding is not assured. Only about 33 percent of campaigns succeed on Indiegogo, according to Masssolutions 2015 Crowdfunding Report,” Stengel writes.
“That’s a higher success rate than raising money from angels or big banks, according to the Center for Venture Research at the University of New Hampshire and Biz2Credit, respectively.”
Entrepreneur, QVC Queen, role model for successful business women and mentor on ABC-TV’s “Shark Tank,” Lori Greiner knows all about successful pitching. Speaking at an entrepreneur’s conference recently at the Chattanooga Convention Center in Tennessee, Greiner said, “I’m not going to take no for an answer. I think that is the entrepreneurial spirit.”
Grenier, who holds 120 patents and has launched more than 500 products, and is arguably one of the more pleasant sharks on the Shark tv show, adds, “If you have a dream and you have a passion to do something, you can make anything happen.”
It isn’t magic, though, and it’s not just about smooth talking. Stengel advises women entrepreneurs to collaborate with a team, because a team raises 340 percent more money than a lone she-wolf entrepreneur working by herself.
Having a video to explain your product, service or idea helps, and can result in raising up to four times as much money, than if you try to do it all without a visual.
“Providing updates, communicating well and often to engage investors also helps.”
But perhaps the biggest factor returns to the emotional intelligence factor of women leaders. According to Psychology Today, looking at new research on the genders, in 11 out of 12 skills that can be measured for emotional intelligence, women outscore men.
The data gathered from 55,000 people in 90 countries confirmed that women leaders also scored higher than male leaders in inspirational leadership, coaching and mentoring, organizational awareness and adaptability.
Author Victor Lipman writes that the study authors told him, “Regardless of gender, our data shows that the most effective leaders within organizations are those who are able to demonstrate emotional and social intelligence. Whether remaining calm during times of turbulence, inspiring and building team consensus, or serving as an empathetic mentor and coach to nurture the next generation of professionals, leaders who tap into their social and emotional intelligence competencies make for highly effective managers.”
About the Author
Michele Weldon is editorial director of Take The Lead, an award-winning author, journalist, emerita faculty in journalism at Northwestern University and a senior leader with The OpEd Project. @micheleweldon www.micheleweldon.com