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To Overcome Gender Bias in Funding, Show VCs You’re Playing to Win

To Overcome Gender Bias in Funding, Show VCs You’re Playing to Win
Business News Daily
By Chad Brooks
Published: June 28, 2017

There is an unconscious bias among venture capitalists that is preventing female entrepreneurs from securing more funding, new research suggests.

A study set to be published in an upcoming issue of the Academy of Management Journal revealed that venture capitalists have different expectations of men and women entrepreneurs, which in turn impacts how much, if any, money they give them.

The research argues that the bias comes in the form of the questions venture capitalists pose to entrepreneurs when trying to learn more about their startups. Specifically, women are asked questions that focus on how they won't lose a venture capitalist's money, while the questions to men focus on how much money they can make.

"Female entrepreneurs are implicitly expected to prove that they can execute a safe return for the investor, whereas male entrepreneurs are instead expected to show the opportunity can grow," the study's authors wrote.

In turn, the answers the entrepreneurs give match the focus of those questions. The researchers said this prompts female business owners to position their startups as "playing not to lose," referred to as prevention-focused, while men are better able to position themselves as "playing to win," referred to as promotion-focused – the latter of which is much more appealing to investors. 

 

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