Looking at Gender Bias in Funding Yields a Surprise Result
In the last few years, accelerator programs across the globe have proliferated. These programs range from three days to six months. Once accepted, startup companies are given access to mentors, feedback on their business plans, and even introduced to venture capital funders. In the same timespan, women are represented in entrepreneurship at a lower rate than their male counterparts, and face greater barriers to funding. In the ongoing study "Acceleration as mitigation: Whether & when processes can address gender bias in entrepreneurship," Nilanjana (Nel) Dutt (Assistant Professor of Strategy at the Department of Management and Technology) and Sarah Kaplan (Rotman School, University of Toronto) try to ascertain if accelerators reduce the gender gap in entrepreneurship.
The authors used a database of accelerators and startups collected through surveys by Professor Peter Roberts of Emory University, Atlanta. "We collected additional information about a subset of 54 programs in 14 countries and choose startups focused on social entrepreneurship. This is an area where female-led teams usually do better." The authors are still elaborating data, but they can disclose some results. The accelerators that claim to embrace female leadership (18 out of 54) get more applicants from female-led teams, whose application rate shifts from 14% (non-women focused) to 31% (women focused). Yet only 25% of the teams accepted are female-led. Surprisingly, female selectors are harsher on female-led teams; having a critical mass of female selectors seems to explain why women are accepted at a lower rate into accelerator programs.
"We are trying to understand the reason why the bias spreads through female selectors. Female-led teams differ from what most people consider as the stereotypical entrepreneur. In a setting of uncertainty about the quality of a startup team, people – including female selectors – may tend to rely on the male stereotype. According to another theory, female selectors, who tend to be concentrated in accelerators that claim to care about women, are simply tougher on everyone, but their selection preferences disproportionately disadvantage female-led teams."
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