YouNoodle, a platform for startup competitions, reveals in a new study that women are likely to receive less bias from startup competition judges.
By Betsy Mikel (Contributing Writer, Women 2.0)
We hear time and time again about how little venture capital funding women entrepreneurs receive and the speculations as to why. But the lifecycle of a startup starts much earlier, long before entrepreneurs pitch their products or prototypes to VCs.
A new study reveals that earlier on — when startups are just getting off the ground, looking for advisors or admittance into an accelerator program — female-founded startups don’t face the same gender bias from competition judges as as they do from VCs. Although only 4 percent venture capitalist funding goes to female entrepreneurs, women are just as likely as men to do well in early-stage startup competitions.
These results are part of YouNoodle’s recently released YN1K study of their top 1,000 early-stage startups from 2013. YouNoodle (a startup itself that knows a thing or two about gender diversity thanks to female co-founder Rebeca Hwang) is a platform for the creation, management and judging of startup competitions. Their YN1K study examined the past year’s entries to get better insight about the demographics of startup founders and to learn what ideas perform best. The results are based on data from more than 17,500 entries in 232 competitions that were judged by about 4.4k judges last year.
Of the 1,000 startups analyzed for the study, YouNoodle found that 28 percent of the YN1K finalists were women, roughly the same percentage of female-founded startups that entered the YouNoodle-powered competitions. This means that women had a better chance at winning a startup competition than they did raising funding later on. Women didn’t necessarily perform better than men, but those who entered had an equal chance of winning one of the competitions.
Does this mean women are just better at pitching their startups in competition than in front of investors? Not necessarily. YouNoodle CEO Torsten Kolind says how these competitions are designed could provide insight. Startup competition judges go into the evaluation process blind — they don’t know the product’s backstory and haven’t personally met the founder, so they judge based solely on the information provided to them in competition.
“That’s very different than the standard investment pitch where you’re typically introduced to someone, and it’s about relationship and trust,” Kolind said. “If you ask your typical VC how they make decisions, they’re still very dependent on their relationships with people.”
Though Kolind isn’t suggesting that investors should completely toss personal relationships out the door when they make funding decisions, he does think this data is an important starting point to see how the startup ecosystem can be less biased.
“This is the first time we have seen this lack of bias in the data, so this is just the beginning,” Kolind said. He said the results of the YN1K study provide reason to further dive into data and uncover more insights about gender bias and the success of female-founded startups.
Do you believe that when it comes to startup competitions the gender bias is dwindling?
About the author: Betsy Mikel is the managing editor of Women 2.0 and runs the content consultancy Aveck. She has a degree in journalism from the University of Missouri and a lifelong obsession with French language and culture. When she's not biking all over every city she visits to find its best taqueria, you can find Betsy on Twitter at @betsym.