Crowdfunding – an opportunity for women environmental entrepreneurs

Green technology innovations often find it difficult to attract traditional financiers such as banks and venture capital firms, especially if the entrepreneur is a woman. A new thesis in economics suggests that crowdfunding can be an alternative financing method that does not disadvantage environmental technologies or women.

Crowdfunding, or grassroots financing, involves the public funding a project by contributing small sums.

- Society has a great need for environmental technology solutions, but research has shown that traditional funders are more reluctant to provide money for environmental projects. Crowdfunding can increase the financing of environmental projects and eventually also arouse the interest of traditional financiers," says the author of the thesis, Victoria Eriksson.

Women in particular find it difficult to get financing from traditional lenders.

- Women are not considered to operate in sufficiently profitable industries or to want to invest in their business. But previous research shows that this is not the case.

Environmental projects are rewarded

In one of the thesis studies, four students from Luleå University of Technology assessed a total of 406 crowdfunding projects. Based on the four individuals' assessments, a picture was created of how an average individual would assess a project. The results show some support for projects that are perceived to be beneficial to the environment receiving more funding. In contrast, the results show that projects that are marketed as environmentally friendly tend to receive less funding - regardless of whether they are perceived as environmentally friendly or not.

- The results suggest that entrepreneurs should be cautious about marketing their projects as environmentally friendly. At the same time, more research is needed to understand what is behind this result and whether the effect varies between different types of projects.

In another study, she looks at whether attitudes towards re-creating an extinct animal are affected by the method of re-creating it. The paper uses a fictitious example where the aurochs, which had a key ecological role in its biotope, is to be reintroduced either through genetic manipulation or a breeding program. The results show that more than half of the 1781 respondents are willing to finance the project. Those who claim to be environmentally concerned are more positive about the project. The method of re-creation does not matter when looking at the whole group, however, women tend to like genetic engineering less than men.

No gender difference

In a third study, Victoria Eriksson analyzes attitudes towards financing rainforest conservation in the Amazon depending on whether the project owner is a woman or a man. A total of 1616 individuals were asked to respond to a questionnaire. There was no difference between men and women in their willingness to donate to the project.

- The study indicates that the willingness to donate to the project is independent of both the gender of the project owner and the gender of the funder. Previous research has shown that traditional funders tend to reward men. The fact that crowdfunders do not do this may be because the group is more diverse than traditional funders," explains Victoria Eriksson.

The fourth study also looked at funders' attitudes towards the gender of the project owner. In total, 2029 individuals' responses to a questionnaire about borrowing money for a fictitious project to develop environmentally friendly batteries were analyzed. Again, neither the gender of the project owner nor the gender of the financier played a role. Instead, the characteristics of the project influenced the willingness to lend money. For example, the results showed that project owners with networks in the automotive industry increased their willingness to finance. However, if the project owner lacked such a network, men were more likely to finance men than women, while male respondents were more likely to finance a female entrepreneur over a male one, if such a partnership had been established.

• The thesis A Penny for the Environment: Perceptions, Signalling and Bias in Crowdfunding i fulltext.