Passion and attractiveness on display: an examination of gender bias in crowdfunding

Surface cues such as displays of passion and physical attractiveness can affect crowdfunding outcomes. Yet the efficacy of these cues may be contingent on other attributes of the entrepreneur, such as their gender. We integrate insights from the elaboration likelihood model of persuasion with those of expectancy violation theory to develop and test a theoretical framework in which the benefit of these cues is contingent on the gender of the entrepreneur and expectancies associated with it. Furthermore, we introduce a novel measurement technique to assess individuals’ implicit gender-based biases related to passion and attractiveness. Plain English Summary Among biased investors, crowdfunding pitches work best for passionate male and attractive female entrepreneurs. Crowdfunding is a way for entrepreneurs to raise funds from a large, anonymous pool of amateur investors. To raise funds on these platforms, entrepreneurs create pitch videos to present to potential investors. When crowdfunding first emerged, there was widespread hope that it would open up new sources of funding to groups of entrepreneurs who are often shut out from traditional sources of funding, such as venture capital. But has that really happened? Or do biases that are common among professional investors also work to the disadvantage of these entrepreneurs in crowdfunding? In this paper, we answer these questions by studying the pitches of both male and female entrepreneurs and their impact on funding success. Our findings offer both a cause for optimism and for concern. On the positive side, we do find that crowdfunding can be a viable source of funding for female entrepreneurs. However, this benefit primarily goes to more attractive females. Furthermore, although being passionate in a pitch is generally a good thing, we find this benefit primarily goes to men instead of women. Without being too pessimistic, we find that these results only hold among those investors who hold certain gender-based biases pertaining to passion and attractiveness. Overall, the principal implication of this study is that biases that limit accessibility to traditional sources of funding also operate within crowdfunding. However, traditionally underfunded groups of entrepreneurs may be able to use these to their advantage.