Investors more likely to give to men over women who are pitching the exact same idea

Well, this is depressing. ThinkProgress flags a new study that shows just how much the gender of the person doing the pitching affects what business proposals are invested in.

Researchers from Harvard, Massachusetts Institute of Technology, and the Wharton School examined three entrepreneurial pitch competitions along with two controlled experiments. “[W]e find that investors prefer entrepreneurial pitches presented by male entrepreneurs compared with pitches presented by female entrepreneurs, even when the content of the pitch is the same,” they write. Good looking men were particularly persuasive, although physical appearance didn’t make a difference for women. This leads to what the researchers identify as “a profound and consistent gender gap in entrepreneurship.”

And it’s no joke that the gap is profound. Women-led companies got just 13 percent of all venture capital funding last year, are less likely to get small business loans, and composed a tiny 3 percent of the companies that went public in the last couple decades. 

This enormous gap despite the fact that women are actually nearly twice as likely to start businesses as men. (Yep, this is not one of those gender gaps you can even begin to blame on lack of interest.) Think about what that means–not just for the female entrepreneurs who worked hard and took some risks and probably will never know for sure if their business would have succeeded if only they’d been a hot dude. Imagine all the good ideas that never reached their potential just because a woman had them. Remember: these were the exact same pitches. That’s a loss for all of us.

You’d think folks in the venture capitalist and entrepreneurial communities–who presumably have far more faith in the invisible hand’s ability to identify and invest in the best ideas than an anti-capitalist like me does–would be seriously concerned by research like this that suggests gender bias is throwing such a major wrench in their visions of a perfect capitalist meritocracy. I look forward to seeing the innovative solutions they’re working on to address this.

Maya DusenberyIn other news, Maya is accepting applications from attractive men who’d like to deliver pitches to investors on behalf of Feministing.

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One Comment

  1. Posted March 12, 2014 at 5:56 pm | Permalink

    I don’t think this will be a popular comment or even if it will be approved, but when I encounter an ad that says X owned business, that moves to the bottom of my list when selecting a service provider. That doesn’t mean I won’t pick it. It now has to be better than the others. Don’t get me wrong, the cleaners I go to is woman owned. One of the grocery stores I go to is woman owned. They never plug that they’re woman owned. I’m not white, but I still have the same issue with an ad that boasts it’s a minority owned business.

    Do we know whether the ideas were pitched in the same way with the same emphasis or did the women play up the fact that it was or would be a woman owned business? Some people may also equate social responsibility with being less compatible with the bottom line. If I’m investing in a woman owned business because it’s a social good, I might also associate that with less return.

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