This probably won’t come as much of a surprise to female entrepreneurs who have tried to raise funding.
Swedish researchers observing government venture capitalists over a year found that they described female and male investors quite differently, and not in a good way.
According to the researchers’ account in the Harvard Business Review, male entrepreneurs tended to get lots of positive language about their “potential.”
These are the terms VCs used about men:
- An amazing innovator
- Extremely competent and knowledgeable
- Willing to take risks
- Young but promising
- Cautious and level-headed
The researchers highlighted how youth and enthusiasm were seen as positive attributes for men, but a sign of inexperience in women. Caution, even if it was a shared trait across the two genders, was also a good attribute in men, but a sign of weakness in women.
VCs questioned women’s credentials much more, and also focused on the way they looked.
These are the terms they used to describe female entrepreneurs:
- Lacking in network contacts and inexperienced
- Having energy and looking happy
- Cautious and nervous
- Inclined to spend money on expensive items
- High maintenance
The Lulea University of Technology researchers, Malin Malmstrom, Jeaneth Johansson, and Joakim Wincent, followed seven Swedish government VCs between 2009 and 2010 for their research and tracked 36 hours of decision-making time. The VCs comprised two women and five men.
Part of the inspiration for their paper was how little government VC funding goes to women. The researchers said EU government VCs account for €3.6 billion of investment. In Sweden, 13% to 18% of government funding goes to female-founded firms, they said.
They suggested that bias, and the way those biases were phrased, may have impacted whether women got funding.
They wrote: “Unsurprisingly, these stereotypes seem to have played a role in who got funding and who didn’t. Women entrepreneurs were only awarded, on average, 25% of the applied-for amount, whereas men received, on average, 52% of what they asked for.”
They added that gender bias meant VCs might not invest in the most promising startups. ” This isn’t only damaging for women entrepreneurs; it’s potentially damaging for society as a whole,” they concluded.