TED Talk: The real reason female entrepreneurs get less funding

As with most inequality information shared, this talk is both infuriating and fascinating at the same time. Dana Kanze is a doctoral fellow at Columbia Business School where she applies behavioral insights to understand sources of inequality in entrepreneurship.

As the TED speaker bio explains:

Prior to embarking upon her PhD, Dana Kanze co-founded and ran a venture-funded startup for five years. Her experiences as a female entrepreneur and CEO inspired her to examine gender distinctions among founders. Her research embraces a mixed methods approach, combining field and archival studies that explore correlational relationships with controlled experiments that develop causal stories. 

What’s this all mean? Well, it’s best if you just watch the 15m talk, but essentially, Dana and her team analyzed hours of transcripts from entrepreneurs trying to raise money from venture capitalists to review the language used and the questions that the VC’s asked. The results?

There were two approaches to the language used and the questions asked:

  • More often male entrepreneurs were asked questions around promotion.
  • While female entrepreneurs were asked questions around prevention.

Here were some of the examples she gave:

Screenshot from Dana Kanze’s TED Talk: The real reason female entrepreneurs get less funding has largely to do with the language used.

When VC’s asked male entrepreneurs about customers they used more promotional words such as what the acquisition rate is predicted to be. Whereas female entrepreneurs were more commonly asked what their retention rate is. Men were asked more about market size/opportunity, whereas women were asked more about their current market share.

The discrepancy was painfully obvious. In Kanze’s analysis, male entrepreneurs were asked questions with promotional sentiments 67% of the time, whereas female entrepreneurs were asked questions around preventative sentiments 66% of the time. Quite infuriating no?

One point that was somewhat surprising: Kanze’s analysis showed that it didn’t make much of a difference if it was a male or female VC asking the questions, which means that gender bias was not implicit. More likely it was an unconscious bias that was leaking through.

Sounds pretty depressing if you’re a female entrepreneur huh? Well, not exactly…

Rather than give up Dana’s full talk here I recommend taking a look. Towards the end she suggest strategies which have been proven to increase the fundraising efforts for female entrepreneurs. If you know of any women on there trying to raise money, or any VC’s that are in a position to invest, this is well-worth a share.

The first step towards fighting inequality is education and awareness.

I’m curious, what did you think of the talk? Let me know in a reply below!