Breaking the Venture Capital Glass Ceiling: Is This What It Takes?
BY Will Yakowicz
An MIT professor says if female founders want to get a greater share of the VC funding pie, they need to do the following things.
When men and women pitch identical start-up ideas to venture capitalists, the men are 40 percent more likely to score the funding.
That's according to a study conducted by MIT management professor Fiona Murray, along with colleagues at Harvard Business School and Wharton. She writes in The Boston Globe that the study created video pitches for new companies with identical slides and scripts, but used male and female voice-overs. In a follow-up study, her team found investors favored pitches from attractive men, while attractive women faired worse than unattractive men and women.
Although there are far fewer female entrepreneurs than there are men, only seven percent of total venture capital funding goes to women, Murray says.
"This is no knock on VCs: The process by which they evaluate opportunities is disciplined, systematic, and rigorous. But let's be clear: It is also social, cultural, and highly emotional--that is where biases can creep in," she writes.
That's bad news not just for female entrepreneurs, but also for the investors who might be missing great opportunities. The question is, what does it take to get over innate bias in the process? Murray says female founders need to start doing the following things:
Wear a uniform.
Murray says that men have "socially prescribed uniforms" like suits, khakis, and button-down shirts, which allow investors to "focus on their words." Women, on the other hand, have more to choose from and they tend to be more self-conscious about their clothes. "My plea to female entrepreneurs: Let's pick a set of 'uniforms'--distinctively female ones, not ones to ape our male colleagues," she writes. While Murray doesn't go so far as to suggest a specific uniform, she says whatever it is, it should be something that lets the focus be the ideas, not the person.
Be assertive and confident.
Murray says that men are generally more self-confident than women are in their pitches. To remedy that, Murray says women need to be more assertive and powerful in their speech and body language, especially during the first few seconds of a pitch. "Women… often make self-deprecating jokes and don't claim the full scale of their ideas," she writes. "Rehearse your pitches with special attention to where you put your arms, how you modulate your voice, and most of all how you begin [the pitch]."
This last one might raise some eyebrows:
Although this may sound like a joke, women can use sports to connect with male counterparts. "Learn to talk sports if you can't already, Murray writes, noting that her colleague has documented the role of sports in social bonding in the male-dominated private equity world. "Talking sports creates a mutual social space and enables the VC to see how you think and form opinions in a different realm," she writes.
What do you think, Inc. readers: Is this what it takes for female founders to garner more funding for their ideas? Let us know your thoughts in the comments.
WILL YAKOWICZ is a reporter at Inc. magazine. He has covered business, crime, and politics at Patch.com, and his work has been published in Tablet Magazine and The Brooklyn Paper. He lives in Brooklyn, New York. @WillYakowicz