Investors Are Biased Against Feminine-stereotyped Behaviours in Entrepreneurs, Regardless of Gender
4 min read · Jan 2025
Balachandra, Briggs, Eddleston, and Brush (2019)
Feminine behaviours decreased the likelihood of being a finalist in a pitch competition by 13%.
Summary
This study examines why so few women secure venture capital funding than men, challenging the notion that investors prefer men over women. Instead, the authors reveal that bias operates through a gender rather than sex-based lens. Successful entrepreneurs are associated with masculine-coded traits, such as assertiveness, independence, and dominance. Entrepreneurs of any gender who display these characteristics are more likely to receive venture capital funding than those who display feminine-stereotyped behaviours.
Method
The authors analyzed 185 elevator pitch presentations from a competition hosted at a top-rated university in the United States during 2007-2008. Judges across six rooms selected the top two pitches to move on towards a finalist stage, a decision used as a proxy for investment interest. Researchers coded each pitch for stereotypically feminine and masculine behaviours by watching the pitches without sound. The authors used regression techniques to predict how feminine or masculine behaviours influenced pitch selection. To validate their findings, the authors conducted an experiment by showing pitch videos of two men, one rated highly in masculine and the other one in feminine behaviours, to a sample of the US population, assessing whether masculine traits were perceived as proxies for business acumen.
Key Findings
Investors do not prefer men over women when selecting pitch competition finalists, however, feminine-stereotyped behaviours are negatively related to venture finalist selection, regardless of sex.
Business competence, preparedness, and leadership are positively correlated with masculine-stereotyped behaviours and negatively correlated with feminine-stereotyped behaviours.
Masculine stereotyped behaviours are associated with higher evaluations of business competence, preparedness, and leadership.
In contrast, feminine-stereotyped behaviours were negatively related to these business attributes.
Takeaways
This study suggests that investors do not discriminate based on sex but rather on gender behaviours, which creates barriers for women entrepreneurs. Research shows that women are more likely to exhibit stereotypically feminine behaviours, putting them at a disadvantage in a venture capital ecosystem that associates entrepreneurial success with masculine traits. When investors prioritize perceptions of the founder over the substance of their ideas, feminine entrepreneurs are unfairly penalized, not for their business acumen but for how they present themselves.
While one potential solution could involve training entrepreneurs, both women and men, to pitch in ways that align with investor expectations, this approach places an undue burden on individuals to conform. Instead, venture capitalists themselves should focus on the merit of ideas and challenge their unconscious biases, as this can help unlock both profits and funding for underfunded groups.
References
Balachandra, Lakshmi, Tony Briggs, Kim Eddleston, and Candida Brush. 2019. “Don’t Pitch Like a Girl!: How Gender Stereotypes Influence Investor Decisions.” Entrepreneurship Theory and Practice 43(1): 116–37.
About WIN-VC Canada:
New Power Labs is the research lead of the Women and Nonbinary (W) Impact (I) Network (N) for Venture Capital (VC), a national collaborative of organizations working to provide services, programming, events, and dedicated resources to women and non-binary entrepreneurs and gender lens investors across Canada who are working towards becoming investment ready and increasing the pool of investors driven to invest in these ventures.
This research is part of WIN-VC Canada, supported by the Government of Canada. WIN-VC acknowledges the support of Innovation, Science and Economic Development (ISED). ISED has awarded funding for WIN-VC that will make the venture capital environment more inclusive for women by transforming traditional investment processes, processes and knowledge into respectful and meaningful approaches that value equity and impact with a focus on diverse women and non-binary entrepreneurs and SMEs including Black communities, Indigenous peoples, racialized populations, persons with a disability, 2SLGBTQ2+ and new Canadians.
