The Gender Gap in Start-up Funding: The Role of Investors’ Benevolent Sexism

Abstract

Past research has consistently shown that female-led ventures tend to receive less funding than male-led ventures, but the reasons for this gap are unclear. Drawing on the ambivalent sexism theory, this study examines how investors' benevolent sexism influences funding allocations to male-and female-led ventures. In particular, I propose that individuals who endorse benevolent sexism are less likely to perceive female-led ventures as viable because they may believe that entrepreneurship is too challenging for women due to their dual roles as homemakers and entrepreneurs. As a consequence, they may want to protect women from failure by giving women less funding as that would make their ventures smaller and easier to manage. I conducted an experimental vignette study where investors, i.e., business students with experience with early-stage venture context, rated their perceptions of the venture viability and made funding allocations for an early-stage venture. Contrary to expectations, benevolent sexism was not related to perceptions of venture viability or funding allocation for female-led ventures. However, investors' benevolent sexism was positively associated with perceptions of venture viability for male-led ventures, which, in turn, was related to greater funding allocations. Although not entirely in line with my hypotheses, the results provided preliminary evidence for the role of benevolent sexism in underfunding of female-led ventures by giving men an advantage in venture evaluation and funding, while equally qualified women do not get the same advantages. Thus, benevolent sexism might be subtly and unnoticeably undermining success of female-led ventures.

Nonconforming behaviors in entrepreneurship: Theoretical foundations, scale development, and empirical testing

“…Following previous entrepreneurship studies, I used Prolific as an online crowdsourcing platform of higher quality than comparable options such as mTurk (e.g., Buttice et al, 2022;Kleinert, 2023;Koller, Stephan, & Ahmetoglu, 2022;Wessel, Thies, & Benlian, 2022). Moreover, Prolific has access to a diverse pool of participants who are more representative of the population than geographically concentrated convenience samples (Nguyen, Hideg, Engel, & Godart, 2023;Peer et al, 2017). The platform also allows researchers to prescreen the sample to recruit participants with specific characteristics.…”