Gender Differences in Crowdfunding - Entrepreneur Overconfidence and Campaign Outcomes

Abstract

We test whether the observed gender differences in crowdfunding performance result from male entrepreneurs’ relative overconfidence by analyzing a near-comprehensive sample of Kickstarter campaigns launched by individual entrepreneurs in the U.S. Suggesting a tendency to overestimate the potential demand for their products, we find that male entrepreneurs set higher goal amounts, which results in more frequent failures. In contrast, female entrepreneurs’ campaigns are more likely to succeed and achieve higher pledged amounts relative to campaign goals. In successive campaigns, male entrepreneurs’ success rates and goal amounts converge toward those of female entrepreneurs, consistent with entrepreneurial experience mitigating the effects of overconfidence.