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Innovation language benefits female entrepreneurs in reward-based crowdfunding

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Gender bias against women in corporate finance is being turned upside down in the context of reward-based crowdfunding, according to new research published in the Strategic Entrepreneurship Journal. Female crowdfunding entrepreneurs, in particular, can benefit from using more innovation language when launching campaigns in male categories, meaning women have more freedom to resist traditional gender stereotypes in the case of reward-based crowdfunding.

The research team of Benedikt David Christian Seigner and Hana Milanov of the Technical University of Munich, Germany, along with Aaron F. McKenny of Indiana University, are contributing to a stream of research examining reward-based crowdfunding, where donors reward such as future products or services for their investment – as a favorable context for female entrepreneurs. The research helps nuance the findings of a 2017 PricewaterhouseCoopers report, which found that female entrepreneurs on nine leading crowdfunding platforms had a 32% higher success in raising funding than males. This success rate is in stark contrast to other traditional fundraising contexts, such as venture capital, in which women are severely disadvantaged relative to their male counterparts.

The researchers used the Expectancy Violations Theory (EVT) as a framework for the study, which helps explain when countering stereotyped expectations is rewarded or punished. “In our case, we study two violations of expectation for women: first, when women portray their crowdfunding campaigns as innovative (because innovation behavior is stereotypically portrayed as a male characteristic), and second, when women launch their campaigns in a men stereotyped category like technology,” explains Seigner.

To test the effects of female entrepreneurs using innovation language for crowdfunding performance, the team used a field survey on Kickstarter. To better understand donors’ interpretation of campaign claims, they also conducted an experimental study using Amazon MTurk to show that donors had more confidence in a woman’s ability when she launched her crowdfunding campaign in a category featuring a male. type, then a category with a female type. .

Whether the contrast stereotyped behavior studied was rewarded or punished depended on two main factors: the interpretation of the behavior as positive or negative, plus the attitude toward the individual engaged in that behavior. Innovation claims in this case were interpreted as ambiguous: crowdfunding financiers love novelty, but delivering more innovative rewards can be seen as more complex and difficult. That meant that the interpretation of this contrast-reotypic behavior was determined by the attitude toward individuals exhibiting this behavior — not by the interpretation of the behavior itself.

“In crowdfunding, the general tendency to preferentially fund women compared to men suggests that even ambiguous contrast stereotypes will be evaluated positively for women,” Seigner says. The effect is further enhanced when the campaigns take place in a category typified by men.

The implication is that female crowdfunding entrepreneurs, especially when using rewards-based platforms, could benefit from using more innovation language when launching their campaigns in male categories. The study adds to existing research highlighting how categories, people, behavior and products can evoke gender stereotypes, and the team hopes to study other entrepreneurial contexts using a gender perspective to better understand how gender bias affects entrepreneurs and their businesses. .

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More information:
Benedikt David Christian Seigner et al, Who can claim and benefit from innovation? Gender and expectation violations in reward-based crowdfunding, Strategic Entrepreneurship Journal (2022). DOI: 10.1002/sej.1426

Provided by Strategic Management Society

Quote: Innovation Language Benefits Female Entrepreneurs in Reward-Based Crowdfunding (2022, August 8), retrieved August 8, 2022 from https://phys.org/news/2022-08-language-benefits-female-entrepreneurs-reward-based .html

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