How Platform Governance Affects Entrepreneurs’ Capacity to Attract Funding

This study focuses on how platform governance in a crowdfunding setting influences the performance of campaigns, and how this effect varies among different user groups. Specifically, we investigate whether giving entrepreneurs discretion over the choice of funding model for their crowdfunding campaign improves the performance of their campaigns, and whether it has different performance implications for male and female entrepreneurs. We find that being able to choose a funding model that reveals an entrepreneur’s preference for risk taking, in contrast to one that reveals risk aversion, has a positive effect on performance. Additionally, we find that female entrepreneurs can benefit more than male entrepreneurs from being able to reveal their risk preferences. We attribute the effects to signaling arguments. However, we also find that female entrepreneurs are in general less likely to choose the riskier funding model, likely due to higher risk aversion of women.