If You Want Funding For Your Business, You're Better Off Being Male And Hot
The gap has been attributed to long-standing gender biases that have become so ingrained in our culture that, even today, both male and female investors prefer pitches from men over women, according to a new report from the Proceedings of the National Academy on Sciences (PNAS).
Additionally, attractive men fare significantly better than their less attractive counterparts, the report finds, while looks have no notable effect on how a female entrepreneur is perceived.
The report is based on three studies conducted by Alison Wood Brooks of Harvard Business School, Laura Huang of UPenn's Wharton School, and Sarah Wood Kearney and Fiona E. Murray of MIT's Sloan School.
For the first study, the team analyzed three pitch competitions over the course of three years. Each contestant had about five minutes to narrate a series of slides outlining his or her business plan, a practice that has become venture capitalists' preferred standard of judging entrepreneurs.
The randomly selected test group was composed of 70 male entrepreneurs and 20 female entrepreneurs. A successful pitch was defined as one that received a prize, and the physical attractiveness of the test subjects was judged by a separate panel of 60 angel investors unaware of the competitions' results.
When weighing just the factor of gender, male entrepreneurs were 60% more likely to achieve pitch competition success than female entrepreneurs. And attractive men were 36% more likely to achieve success than their average-looking counterparts.
The results remained the same regardless of differences in the business sector presented, the pitch competitions evaluated, the time the pitch was given, and how long the pitch lasted.
In the second study, the research team recruited a nationally representative sample of 521 Americans, of which 47% were female. It collected real startup pitches from a university competition and had a panel of 12 expert investors rank each pitch on a scale of 1 to 7 for how likely it was to succeed. Participants were paid based on the accuracy of their choices, in an effort to control any conscious biases.
The sample group sat at a computer and watched a pitch slideshow narrated by either a randomly assigned male or female voice. Although the voices presented identical pitches, 68% of participants chose to fund the ventures pitched by a male voice and only 32% of participants chose to fund the ventures pitched by a female voice.
The age and gender of the participating judges had no effect on decision-making.
For the final study, 194 Americans (57% female) were shown just one narrated pitch video accompanied by a gender-matched photograph previously judged as either attractive or not. The researchers asked participants to rate how likely they were to invest in the company after hearing the pitch, as well as other qualifying questions.
Once again, male-narrated pitches significantly outscored identical pitches narrated by women, and those from men were also found to be more "persuasive," "fact based," and "logical."
On a scale of 1 to 7 (7 meaning very likely to invest), attractive men averaged 5.21, while less attractive men averaged 4.59. Meanwhile, unattractive women scored slightly higher than attractive women, but within the margin of error.
The report found a clear correlation between gender and success, and the importance of good looks for men.
The researchers acknowledged that previous research suggests women entrepreneurs become more appealing when they pitch companies traditionally associated with old gender stereotypes (beauty, fashion, and cleaning, for example), but they did not ask participants to explain their decisions.
Even without explanation, the report suggests that entrepreneurialism is still seen as a man's venture, and both men and women cling to this bias.