Women who launch breakthrough businesses are less likely to be funded due to investors’ unconscious biases against female entrepreneurs, according to a study by Northeastern University researchers that included an examination of episodes of Shark Tank.
Novelty is vital for entrepreneurship. However, this becomes an invisible handicap for women who face the “double bind” effect, according to the study.
The “gender responsibility of entrepreneurial novelty”, co-authored by Professor Northeastern Zhen Yu Liaopublished these results in the Academy of Management Journal.
Liao’s findings are based on the results of three studies, including a review of the archives of Shark Tank, the popular ABC television show in which entrepreneurs pitch their products and ideas, coupled with online and on-site experiments. ground.
The study data is unique because the researchers examined on-air interaction between the entrepreneurs and the Sharks, five famous venture capitalists who sit on a panel. The researchers analyzed the sharks’ spontaneous reactions and their more deliberate thinking.
The Sharks’ implicit biases were evident in some cases, Liao says.
One example cited by the research was a proposal made for a thin mirror, which shows a person approximately 5 to 10 pounds lighter in the reflection. The female entrepreneur wanted to introduce the product to clothing stores to help them sell more items.
But she received a very harsh comment. One of the sharks said: “This supports a lie…it’s a lie to someone…I’m facing reality, I’m not going to be part of this sham…it’s bullshit.” You lie to people.
Liao says the shark would probably have said the idea was very interesting if a man had presented it and possibly suggested another buyer, such as a gambling house, because the item is misleading.
Another example, Liao says, is when a husband and wife duo offered the sharks a drink infused with apple cider vinegar.
The male shark said, “I’m not sure America is ready to have vinegar up to its nostrils,” and added that entrepreneurs will have to reinvent the category to get people used to the idea of having natural preservatives.
“It’s really pioneering and what often happens to pioneers is they get a lot of arrows in the back,” he continued.
When a female shark intervened, she advised considering adding hard alcohol to the drink to sell it to a wider audience. The female shark decided that she too was not investing.
During another episode, a woman introduced a “Switch Witch,” or a doll that will collect children’s Halloween candy, in exchange for a gift to reduce sugar consumption.
In response, a male shark said, “I’ve never heard of it.” I think you should take inspiration from what really happened in Salem in the past. …If I were you, I would take this behind the barn and burn it because I think it sucks.
Sharks wondered why the product didn’t take off or go viral.
In contrast, when a male investor proposed a Bluetooth device surgically implanted in the ear to prevent devices from falling out during movement, the Sharks may not have invested but called it “genius” and “ahead of its time”.
The entire industry should work on implicit bias against women, Liao says. This should not be a way for women to fix themselves or have a better chance of getting funding.
Last year, U.S. startups with all-female teams received 1.9%, or about $4.5 billion, of about $238.3 billion in venture capital allocated, according to the latest PitchBook data . The percentage increases from 2.4% of all-female teams raised in 2021, according to TechCrunch.
Women’s gender norms — being polite, accommodating in groups, and caring — can be seen as contrary to what it takes to be an entrepreneur, Liao says. Being an entrepreneur means being a leader, bold and extroverted, he says.
There is no clear solution, Liao says. Studies show that female investors are sometimes even more prejudiced against women because they understand the obstacles they face and can make harsher judgments. Having more female investors won’t necessarily help solve the problem.
However, the gender of investors may matter. There’s a lot of research on the effects of homophily, meaning we tend to bond with genders similar to our own. Since men dominate the venture capital industry, they tend to interact with more men. If there are more women, it may be helpful for them to create connections among themselves.
“Having more women can reduce implicit bias, but fundamentally we should fix the system; we should also address occupational gender segregation and the role the general public can play towards women in the industry.
Beth Treffeisen is a reporter at Northeastern Global News. Send him an email to b.treffeisen@northeastern.edu. Follow her on Twitter @beth_treffeisen.
