Don’t Pitch Like a Girl!: How Gender Stereotypes Influence Investor Decisions
Entrepreneurs displaying stereotypically “feminine” behaviors during venture capital “elevator pitch competitions” are less likely to be selected as finalists regardless of actual gender.
Gender disparities in securing venture capital funding emerges as early as the “pitch” stage, when entrepreneurs present ideas to prospective investors hoping to persuade them to learn more about the venture. Approximately a mere 10% of successful ventures at this stage are led by women. Research suggests that this disparity is due to gender-based discrimination against women. This study, however, examines how specific entrepreneur behaviors during the pitch, whether they display masculine or feminine characteristics, affects their chances of securing investor support.
Occupations are perceived as “masculine” or “feminine” based on how the traits required for the job are gender-stereotyped. Highly interpersonal roles that require being warm, nurturing and expressive are considered “feminine” (e.g. nursing) and ambitious, task-oriented roles that require being dominant and independent are often seen as “masculine” (e.g. entrepreneurship). Gender roles stereotypes also produce bias against women who try to adapt by behaving in a more masculine manner, contrary to what is expected of them. Female politicians frequently face such backlash (see Okimoto & Brescoll 2010).
The authors investigate whether acting “female” decreases chances of receiving positive investor evaluations during the pitch stage of venture capital funding. The authors hypothesize that, regardless of gender, entrepreneurs exhibiting attributes and behavior stereotypical (and thus, desirable) for their occupation will earn investors’ favor. The authors analyzed the behaviors entrepreneurs from video recordings of an “elevator pitch competition” in 2007 and 2008. The authors then analyzed investors decisions and success rates for entrepreneurs who displayed mostly masculine or feminine behaviors during their pitch.
In the earliest stage of seeking venture capital, being a woman does not negatively affect investors’ interest in learning more about the venture, but displaying stereotypically feminine behaviors leads to lower success rates.
- Ventures pitched by men were not more likely to be supported by investors than those pitched by women.
- Displaying masculine-stereotyped behaviors during the pitch did increase the chances of investor support, but not by a statistically significant amount.
- Displaying feminine-stereotyped behaviors during the pitch decreased an entrepreneur’s chance of being selected as a finalist by 13 percentage points.
- Consistency between an entrepreneur’s sex and stereotypical gender-associated behaviors represent was not an important factor in whether or not he/she was selected as a finalist.
Displaying feminine-stereotyped behaviors during a pitch negatively affected prospective investors’ assessment of the entrepreneur’s business competency.
- In a smaller post-hoc experiment, competency ratings (on a Likert scale of 1-7) were higher for general competence (2.1), preparedness (2.9), and leadership (3.0) for the male entrepreneur displaying masculine-stereotyped behaviors than for the male entrepreneur displaying feminine-stereotyped behaviors.
This study retrospectively analyzed the 185 pitches of early-stage ventures made in elevator pitch competition events at a major northeastern university in the United States in 2007 and 2008. Entrepreneurs competed for selection to the final round by a panel of venture capitalist judges experienced in their industry. Video footage of each 1-minute pitch was independently analyzed by two research assistants for the following entrepreneur attributes that are stereotypically male or female: forcefulness, dominance, aggressiveness, assertiveness, warmth, sensitiveness, expressiveness, and emotiveness. The assistants also noted biological sex and rated the entrepreneur on physical attractiveness. To reduce personal bias about gender stereotypes, the assistants were not informed of the study’s goal or that these attributes are considered “male” or “female.” Evaluation of entrepreneur traits by a party other than the investors is a novel aspect of this study’s design.
These assessments were then compared to the competition’s outcome: selection of two pitches per industry for the final round. The analysis controlled for entrepreneur attractiveness and the market potential of the venture stated during the pitch (scale of 1-5, ranging from less than $1 million to over $1 billion). This analysis revealed that stereotypically feminine behaviors had a negative impact on an entrepreneur’s chances of being selected as a finalist (see Retroactive Analysis Findings).
To further investigate this finding, the authors selected two of the competition’s pitches from one industry category that were both made by a man, one who displayed masculine-stereotyped behaviors and one who exhibited feminine-stereotyped behaviors. They asked 20 venture capitalists across the country (10 male and 10 female) to watch these videos without sound and state which entrepreneur they would prefer to meet to further discuss his venture. Then the investors rated (on a scale of 1 to 7) each entrepreneur on business competency measurements, e.g. strong leadership, preparedness and business competence.