Entrepreneurs developing innovative ventures are a fierce economical player: they provide 20% of new jobs in the US every year. To kick-start this process and the ensuing economical growth, these entrepreneurs first pitch their ideas to investors. If you were pitching your idea, you would probably want your potential investors’ funding decision to be based on your business plan and your interaction with them. Unfortunately, your gender matters, too; and you will never guess how much.
What percentage of venture funds in the US do you think women received (at least 10 years ago)? If you guessed thirty percent, you were wrong. Half of that – fifteen percent – is also wrong. The answer is seven percent.
A team from Harvard, UPenn and MIT wanted to take a closer look at this phenomenon. They sampled 90 start-up pitches from entrepreneurship competitions in the US, and found that:
Men were 60% more likely to win an investment compared to women.
Attractive men were 30% more likely to win compared to unattractive men (as rated by independent observers)
Surprisingly, women’s attractiveness did not matter to investors, who were biased against them regardless of their looks. Even when you are not objectified, ladies, you are still at a disadvantage.
These findings indicate an association between entrepreneur gender and funding decisions, but they do NOT show that gender is truly a cause driving those decisions (maybe men and women present their ideas in different styles, and only the former’s resonates with investors?). A more controlled experiment would test the very same pitch, presented by a man to some decision makers and by a woman to others. Luckily, the researchers did that!
They asked 500 people (non-experts) to watch two videos, each presenting a pitch from the veterinary sector. The videos only showed slides, but were accompanied by voice-over narration from a fictitious entrepreneur: half the participants heard a male voice narrating video A and a female voice narrating video B; the other half heard the opposite. They then chose which of the two ideas was more likely to succeed. Here is what happened:
Almost 70% of the participants – both men and women – chose whichever pitch was the one narrated by a man.
The very same videos were rated as more persuasive, fact-based and logical when narrated by a man compared to a woman.
When a picture of the fictitious entrepreneur was presented along with the video, participants’ choices were influenced by the attractiveness of the man, but not by that of the woman.
MY TWO CENTS: Men, take better care of your appearance. It pays off. More importantly, by virtue of what’s described above, 93% of the responsibility for telling your investors about these findings is on you, not on your women colleagues.
CITATION: Brooks, A.W., Huang, L., Kearney, S.W., & Murray, F.E. (2014). Investors prefer entrepreneurial ventures pitched by attractive men. Proceedings of the National Academy of Sciences, 111(12), 4427-4431.