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Is crowdfunding meritocratic?

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Is crowdfunding meritocratic?

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The web has a well earned reputation for meritocracy.  The famous New Yorker cartoon from yesteryear proclaimed that on the web, no one knows you’re a dog, and for a long time that perception of the online world as one where your identity mattered less than your ideas and thoughts persisted.

There has been evidence that this facade has been creaking however.  For instance, a study published last year by the University of Virginia looked at how we buy and sell goods via classified sites.  They found that when the product in question was being held by a black hand in the photo, it received significantly fewer offers for it, and the offers they did receive were lower than product photos with white hands in them.

A similar finding emerged when researchers explored the sofa surfing website AirBnB this year.  The study explored how the photos of property owners influenced both the rental prices and the success rate of profiles on AirBnB and found that black property owners charged approximately 12% less for their property than owners of similar properties from different ethnic backgrounds.

You’re probably spotting a trend here, and a third study probably confirms it.  It was looking at the venture capital community to explore the kind of companies, and the kind of entrepreneurs that were getting backed financially.

Participants in the study, who were actual investors, were asked watch videos of people making a pitch, after which they were asked to rate each pitch for persuasiveness.  They were also asked to rate how attractive they found the entrepreneur.

It emerged that the investors were significantly more likely to choose male entrepreneurs over their female peers, even if the content of the pitch was practically identical.  And that wasn’t all.  It also emerged that the prettier the entrepreneur, the more persuasive they were found to be.  Providing they were male that is.  Women could be as pretty, or as ugly, as they wanted, it made no difference.

To further explore this hypothesis, a 2nd experiment was conducted.  This time, an online tool was used to allow people to grade the persuasiveness of a pitch, but the investor could only hear the pitch, not see who was giving it.  Again though, male entrepreneurs were found more backable.

All of which isn’t a great picture.  We’ve had indications of racism amongst peer to peer sites online, whilst now it seems that investors might be prejudicial against women entrepreneurs.  It would be interesting to see this study conducted on the crowdfunding community, where typically each pitch is accompanied by a profile picture of the founder, in much the same way as profiles on AirBnB are.  Would handsome guys do better there too?

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