Female startup founders have a notoriously harder time securing funding than men. But new methods of financing could help close the gender gap. One of those methods lies in the buzzy technologies of blockchain and cryptocurrencies.
“Cryptocurrency, being a digital platform, fundamentally erases that sort of bias and does create a sort of leveling of the playing field,” said Lisa Wang, founder and CEO of SheWorx. “Women who are savvy and are able to hop onto the train are able to raise money really quickly for their ideas.”
SheWorx hosted an event last month for its New York City members dubbed “Cryptocurrency 101: Practical Advice on Getting Involved in Bitcoin & Beyond.” About 35 women showed up to learn more.
“For a lot of women, they’re looking at the Bitcoin prices, the Ethereum prices, Litecoin prices and they’re saying, ‘Oh my gosh, it’s too late for me to get involved,’” Wang said. “It’s not too late, you didn’t miss the boat.”
Women received just 11 percent of total venture funding in the first half of 2017, according to TechCrunch.
What is blockchain?
Could blockchain pave the way to more financing for women?
Blockchain technologies have garnered a lot of attention lately, thanks in part to the roller-coaster ride of their most famous protocol and cryptocurrency, Bitcoin.
The distributed ledger technology (DLT) that underpins cryptocurrencies like Bitcoin enables peer-to-peer or machine-to-machine transactions without the need for intermediary third parties.
This removal of middlemen (and their subsequent fees) is a major draw for both startups and established companies across a variety of industries.
Wang said entrepreneurs should assess their risk profile, determine whether blockchain is a fit for their startup, and research the types of fundraising processes that could best serve them.
Tech startups are now exploring the option of issuing their own unique tokens or coins, based on an established blockchain protocol like Bitcoin or Ethereum. Others are creating entirely new blockchain protocols and alternative coins.
These initial coin offerings (ICOs) allow startups to raise money quickly in a limited amount of time, via crowdfunding. Unlike traditional initial public offerings (IPOs), ICOs do not offer investors an ownership stake in the company. Instead, investors assess the potential usefulness and value of an alternative or “alt” coin, and the long-term profitability of its parent product or service, whether it makes sense as a blockchain application.
Michelle McCormack is the founder and CEO of Casting Coin, an Ethereum-based token that will launch this year and be used as currency on a crowdsourcing platform connecting models and brands.
Using blockchain tech
McCormack spoke at the SheWorx event and explained how her fashion industry experience helped her identify a gap in the model booking business.
“Models are a perfect example of people that have a really hard time connecting with work unless they know somebody ... a lot of times, they’re faced with dealing with shady, internet intermediaries who are calling themselves agents,” McCormack said. “When they do get work, they have to give at least 20 percent of their rate to the agent.”
McCormack is a building a blockchain-based platform where industry influencers pay Casting Coins to up-vote or down-vote models, resulting in a new kind of crowdsourcing business model for the traditional model and talent agency.
“Over time, a natural influencer vertical and talent vertical will come up ... so that the brand can easily identify them, directly hire them,” McCormack said.
While some may be deterred by the ambiguous qualities of a nascent technology like blockchain, McCormack said women should get involved sooner rather than later.
“There’s no legacy of male domination in blockchain, because there’s no legacy. So why not get involved, build something?” McCormack said.