Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 419: The contribution patterns of equity-crowdfunding investors: Gender, Risk aversion and Observational learning

Ali Mohammadi () and Kourosh Shafi ()
Additional contact information
Ali Mohammadi: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Kourosh Shafi: Department of Management, Economics, and Industrial Engineering, Politecnico di Milano, Postal: Piazza Leonardo da Vinci 32, , 20133 Milan, , Italy.

Abstract: The scholars and popular news has argued that new form of investment through online platform known as equity Crowfunding increases the gender equality in financial market for both entrepreneurs and investors. In this paper we investigate whether there are gender-differences in the behavior of investors in firms seeking equity financing in comparison with other settings (e.g. stock market, pension saving). Using data from Swedish equity crowdfunding platform– Fundedbyme, we find that only 20% of investors are female. We also find female investors are less likely to invest in the equity of younger firms, high-technology firms, and those firms with higher percentage of equity offerings. This pattern seems consistent with more risk-aversion of female investors compared to male ones. Furthermore, women are more likely to invest in projects in which proportion of male investors is higher. Overall our result shows that there are not major in pattern of investment between equity crowdfunding and other traditional investment settings.

Keywords: Equity crowdfunding; Gender; Herding; Observational learning; Risk-aversion

JEL-codes: G02; G11; G20; M13

32 pages, August 21, 2015

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