How gender biases drive venture capital decision-making: exploring the gender funding gap

Abstract

Purpose

Men founders raise almost 50× more venture capital (VC) than women. As 93 per cent of VCs are men, because of the significant gender imbalance in gatekeepers and investment decision-makers for early-stage capital, there may be critical outcomes for women entrepreneurs who are being caused from men having overweighed in decision-making roles. Outcomes include biases against women by VCs that prevent their ventures from being considered for funding from the pitch as well as obtaining opportunities to pitch VCs in consideration for funding from biases in the evaluations of the businesses themselves.

Design/methodology/approach

This paper is a consolidation of several studies the author has conducted in VC decision-making and gender bias to understand the drivers of the enormous gender gap in VC funding. The author presented it as a talk at the University of Regina and was asked to submit a paper about it here.

Findings

The findings reveal how the 93 per cent male context of the VC industry is in itself a significant cause of the gender gap in funding. If there were more women VCs, more women entrepreneurs would be funded.

Originality/value

The author showcases how the gender gap in decision-making roles in VC has important implications for women entrepreneurs to obtain funding.

Citation

Balachandra, L. (2020), "How gender biases drive venture capital decision-making: exploring the gender funding gap", Gender in Management, Vol. 35 No. 3, pp. 261-273. https://doi.org/10.1108/GM-11-2019-0222