We Ask Men to Win and Women Not to Lose: Closing the Gender Gap in Startup Funding

Start-up funders tend to ask men about how they will promote success and women about how they will prevent failure, contributing to the gender gap in funding allocation.  Replying to prevention-focused questions with promotion-focused answers can help founders counter biased motivational questions.

Introduction

Although nearly 40% of all privately held firms in the United States are founded by women, only 2% of U.S. venture capital financing is allocated to female-founded firms. Given that venture funding is a key component of startup success, this funding disparity greatly limits the ability of female entrepreneurs’ projects to succeed.

Previous research on the gender disparity in startup funding seeks to provide either investor-driven or entrepreneur-driven explanations for the gender gap, focusing, for example, on whether investors have a marked gender preference when making investment decisions, or whether female entrepreneurs are presenting themselves or pitching their projects in ways that hamper their success.

This study seeks to examine the investor-driven and entrepreneur-driven factors as a feedback-loop system, investigating how gender bias in investors’ questions leads to divergent entrepreneur answers during the venture capitalist pitching competitions Q&As—both contributing to the gender gap in startup funding allocations.

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