Is the Gender Gap in Venture Funding Driven by Biased Investors?

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Abstract

Gender disparity in entrepreneurship and venture capital funding has been documented in many economies across the world. This study aims to unfold whether gender disparity in venture capital funding is driven by discrimination. We conduct a randomized lab-in-the-field experiment in the UK and Europe and examine the behavior of venture capital investors towards female entrepreneurs during the screening stage of funding proposals. We find that male investors display no differential treatment or bias (taste-based discrimination and miscalibrated beliefs) against females. On the contrary, we find evidence of bias among female investors, where they positively discriminate in favor of their own gender. The study findings indicate that female entrepreneurs are not at a disadvantage when evaluated by male investors. Thus, the gender disparity in venture funding is not driven by biased male investors. The findings also suggest that increasing the number of female investors in the venture capital industry would increase females’ share of the capital invested and positively contribute to closing the gap.
Original languageEnglish
Title of host publicationProceedings of the Eightieth Annual Meeting of the Academy of Management
EditorsGuclu Atinc
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date2020
DOIs
Publication statusPublished - 2020
EventThe Academy of Management Annual Meeting 2020: Broadening Our Sight - Virtual
Duration: 7 Aug 202011 Aug 2020
Conference number: 80
https://aom.org/events/annual-meeting/past-annual-meetings/2020-broadening-our-sight

Conference

ConferenceThe Academy of Management Annual Meeting 2020
Number80
LocationVirtual
Period07/08/202011/08/2020
Internet address
SeriesAcademy of Management Proceedings
ISSN0065-0668

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