Female founders sometimes have a tough time in the startup scene. It's no coincidence that women are in the minority when it comes to the number of startups. Even those who regularly attend startup events are familiar with the quantitative gender ratio in the scene. Why is this? A study sheds light on the issue.
How t3n reports that women are also significantly disadvantaged when it comes to the allocation of venture capital. According to the magazine, in 2016, $58 billion in venture capital went to all-male founding teams, but only $1.46 billion went to female founders—a stark disparity.
How does this happen?
A study published in February now provides some clues as to why female founders have more difficulty accessing capital. In 2009 and 2010, a Swedish research team sought to document the decision-making processes of venture capitalists and followed seven venture capital firms for this purpose. The researchers noticed that the VC decision-makers discussed male and female founders differently. Thus, the gender issue was not initially the focus of the researchers' research.
After analyzing the discussions to determine whether female or male founders were being discussed, the study authors came to some interesting conclusions: VC decision-makers frequently rated young female founders as "young and inexperienced," while their male counterparts were described as "young and promising." Women who made cautious decisions were described as "not bold enough," while men were described as "prudent." Men's appearance was not rated, but that of their female colleagues was.
As a result, male founders received an average of 52 percent of the capital they raised, while female founders received only 25 percent.
This study certainly doesn't provide a definitive answer to the gender imbalance in the startup scene. However, the results invite reflection on the standards we apply to certain founders.
