Women only get 4.2 percent of venture capitalist funding, which is an incredible gap. A forthcoming study from Stanford's Clayman Institute for Gender Research takes a look at possible reasons, and finds that women without a technical background have a big disadvantage.
The researchers created identical executive summaries for a startup, and modified the education (technical or non-technical) and gender of the fictional entrepreneur, and asked participants to rate the venture 's likelihood of success and their impression of the entrepreneur.
Though the study is still in its preliminary stages and more results are forthcoming, the authors found that gender has a big impact on how investors react to pitches:
- For women, a technical degree helped "level the playing field" in terms of confidence and the willingness to meet and invest.
- Women with non-technical backgrounds were given significantly lower ratings. A non-technical background or degree, in business for example, could be an advantage for men, but was harmful for women.
- Having strong network ties is "critical for women," and more important for a positive reception investor confidence than it is for men.
Buzzfeed's John Herrman spoke to one of the study's authors, CSU Northridge Professor Andrea Davies Henderson, who credits the results to the fact that " the entrepreneurial profession has been 'typed' as male."
She argues that venture capitalists are used to the idea of a man as the "ideas" or "operational" guy, but have a cultural expectation that women founders have a specific technical skill.
Venture capitalists are more receptive to the idea of female engineers or experts, but think of men when they hear the word "entrepreneur."
Part of the reason could be that the participants in the study were from an entrepreneurship club and Stanford's business school, and tended to be white males. But that demographic mix is similar to venture capitalist's as a group, meaning that women are likely to run into similar attitudes in the real world.
It's a subtle bias, but one that may limit the number of or types of pitches from women that get a fair hearing or investor money.
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