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28 March 2013 No Comment

A new study suggests that female entrepreneurs are significantly less likely to get funding than their male counterparts — unless they come from a technical background.

enhanced buzz 17711 1364487136 4 How Venture Capitalists See Women

Facebook's Sheryl Sandberg attends the annual meeting of the World Economic Forum (WEF) in Davos January 25, 2013.

Image by Pascal Lauener / Reuters

A Buy Star Diazepam by researchers at Stanford’s Clayman Institute for Gender Research suggests that venture capitalists' willingness to invest in a startup is significantly influenced by the gender of the entrepreneur.

“We took an executive summary of a successful startup that had, in real life, secured VC funding,” explains Stanford's Andrea Davies Henderson, one of the researchers involved with the study. The summary was based on a startup that had been successful in the past six months (the earliest research took place at the beginning of 2007). There were four variations of the executive summary: one associated with a man who had a non-technical (business) background, one from a woman with a non-technical background, and one each for a man and a woman with a technical background. The pitch was the same, as were the surnames.

Respondents, who judged the summaries based on likelihood of investment and likelihood of taking a meeting, among other things, returned curious results. (Rather than use undergrads for the study, as is customary, the study relied on members of an entrepreneurship club at the Stanford Business School, who were a close demographic match to actual VCs — largely white and male, with (pending) degrees from a top business school. Age was the only major difference.)

“What we found was that having a technical background helped both men and women,” says Henderson. “But it helped women more, in terms of likelihood to invest a higher percentage, and likelihood to schedule a meeting with an entrepreneur.” Having a technical background helps break down barriers, in other words, at least in terms of investors having confidence.

Business-oriented candidates were a different story, however. “Not having a technical background hurt women — it hurt their chances of securing a meeting and securing funding,” says Henderson. “But it didn't hurt men.”

This, suggests Henderson, is because the entrepreneurial profession has been “typed” as male. A woman pitching a startup without a specific and relevant technical skill is “violating cultural norms within a corporate setting,” says Henderson, while a man doing the same is embodying a well-worn archetype: the ideas guy, or the operational guy.

Another finding: the presence of “strong recommendations” were signficantly more important to women than to men.

The Clayman Institute, which is the academic partner for Sheryl Sandberg's “Buy Diazepam Next Day Delivery” foundation, is hoping to share more detailed findings soon — at the moment, the study in the process of publication.

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