A lot has been written about the biases against female entrepreneurs in the venture world recently, including a fair amount of testimonials and op-eds retelling some disturbing events where female entrepreneurs were discriminated against. But there is also a substantial amount of scientific evidence to prove that these biases exist, including one particularly telling experiment at Columbia University where participants were asked to listen to Q&A audio files, then asked to allocate funding.
In the experiment, a group of professionals and ordinary people listened to question and answer exchange (Q&A) audio files with dialogue pulled from TechCrunch transcripts and then allocated funding based on the dialogues. Each Q&A had a distinct orientation; some included questions that focused on ideals, potential gains and advancements. Others focused on the interviewer’s safety, security and responsibility concerns.
The researchers found that men are usually asked questions about ideals, potential gains, and advancements (promotion-based questions), while women are typically asked questions about safety, security, and responsibility (prevention-based questions). This is unfortunate, because entrepreneurs who were asked promotion questions received twice as much funding as those who were asked prevention questions. Based on the results of Kanze, et al.’s research, the difference in Q&A approach is an important contributor to the gender gap in high-impact entrepreneurship.
The results speak for themselves. Male-led startups raised five times more even though startups in the sample were financially comparable. In their analysis of video transcriptions from Q&As, the researchers found that VCs tended to ask men questions with an optimistic promotion orientation (67 percent) and women entrepreneurs were asked questions with a cautious prevention-orientation (66 percent). The vast majority of entrepreneurs responded to questions in a way that matched the promotion or prevention orientation of the question. Those who received promotion questions or responded with a promotion orientation were much more likely to receive funding. The researchers took their observations from TechCrunch and developed the Q&A recording study to confirm the bias.
The researchers’ approach of looking at the interactions between VCs and entrepreneurs is an important breakthrough. Kanze et al. found that female VCs were as likely to exhibit bias in their questions, reinforcing findings by a Bloomberg study showing that firms with female senior investing partners were not more likely to support companies founded by women. Pushing for more female VCs and entrepreneurs will have minimal impact if the conversation between investors and entrepreneurs is not standardized.
Entrepreneurs can be better equipped to benefit their startups by recognizing the difference between the two question types and answering with promotion-oriented responses. Kanze suggests VCs improve their decision-making process by asking an equal balance of promotion and prevention questions to all entrepreneurs.
To access the original study, titled We Asked Men to Win and Women Not to Lose, please click here.
Contributed by Hannah Juge.