Only 4.2% of venture capitalist funding goes to women. Why so little? A new study out of Stanford offers aggravating but enlightening answers. By Jessica Stillman (Editor, Women 2.0)
The amount of VC funding that goes to women is low, pathetically low, at just 4.2%. Sure, tech and entrepreneurship skews male but not that male, so what's up with this dismally low figure?
Forthcoming research out of Stanford's Clayman Institute for Gender Research aimed to find out by showing the largely white and male membership of a Stanford entrepreneurship club (so a group roughly demographically similar to actual VCs) executive summaries of a successful, real-world startup.
The summaries, however, were altered slightly in key ways so that there were four variations, associating the startup with either a technical or non-technical male founder or a technical or non-technical female founder. How did these hypothetical female founders fare? Buzzfeed's John Herman spoke to Stanford researcher Andrea Davies Henderson, who was involved with the study and sums up the results:
Respondents, who judged the summaries based on likelihood of investment and likelihood of taking a meeting, among other things, returned curious results…
"What we found was that having a technical background helped both men and women," says Henderson. "But it helped women more, in terms of likelihood to invest a higher percentage, and likelihood to schedule a meeting with an entrepreneur." Having a technical background helps break down barriers, in other words, at least in terms of investors having confidence.
Business-oriented candidates were a different story, however. "Not having a technical background hurt women — it hurt their chances of securing a meeting and securing funding," says Henderson. "But it didn't hurt men."
So in other words lady geeks might have something to offer as founders, but when it comes to the hustling, business side of things, VCs still largely picture a man and are more skeptical of a woman. Or, more bluntly, as Business Insider headlined its coverage of the research: "Venture Capitalists Don't Respect Female Entrepreneurs."
Both writeups offer the same takeaways for women looking to get VC money. Having a tech background will help you a lot, and also – no surprise here – having a strong networks pays. "Having strong network ties is 'critical for women, and more important for a positive reception investor confidence than it is for men," notes Business Insider.
Women 2.0 readers: Do these findings jive with your real-world experience?
Jessica Stillman is a freelance writer with interests in unconventional career paths, generational differences, and the future of work. She writes a daily column for Inc.com and has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist, among others. Follow her on Twitter at @entrylevelrebel.