Implicit Gender Bias in Startup Funding

While there have been many words written about gender bias in the context of entrepreneurship and funding, I thought the following TED Talk from Dana Kanze presented one of the best frames of references, supported by a real research study, that I’ve seen to date. In addition, she has some clear, actionable suggestions at the end of the talk to help eliminate the bias.

Her research emerges from her own exploration of a social psychological theory originated by Professor Tory Higgins called “regulatory focus.” This theory explores the different motivational orientations of promotion and prevention.

While listening to Dana’s explanation and examples in the video, I had a deep insight — around how to ask questions of an entrepreneur — that hadn’t occurred to me before. Here are her direct definitions of promotion focus and prevention focus.

“A promotion focus is concerned with gains and emphasizes hopes, accomplishments and advancement needs, while a prevention focus is concerned with losses and emphasizes safety, responsibility and security needs. Since the best-case scenario for a prevention focus is to simply maintain the status quo, this has us treading water just to stay afloat, while a promotion focus instead has us swimming in the right direction. It’s just a matter of how far we can advance.”

Dana’s punchline is that investors approach female entrepreneurs with a prevention focus and male entrepreneurs with a promotion focus. Interestingly, she finds this is consistent regardless of the gender of the investor!

The talk has a clear recommendation for female entrepreneurs in it. Basically, if you get a prevention question, reframe the answer in a promotion context.

“So what this means is that if you’re asked a question about defending your start-up’s market share, you’d be better served to frame your response around the size and growth potential of the overall pie as opposed to how you merely plan to protect your sliver of that pie.”

Dana also has a suggestion for how investors (both female and male) can help eliminate this implicit bias.

“So to my investors out there, I would offer that you have an opportunity here to approach Q&A sessions more even-handedly, not just so that you could do the right thing, but so that you can improve the quality of your decision making. By flashing the same light on every start-up’s potential for gains and losses, you enable all deserving start-ups to shine and you maximize returns in the process.”

Her talk is only 15 minutes long and well worth it. Or, if you are a fast reader, take a look at the transcript.


Originally published at Feld Thoughts.