Getting your foot in an investor’s door might be a little easier than you think.
A new study out of the Stanford Graduate School of Business, led by professors Ilya A. Strebulaev and Will Gornall, indicates that white and Asian women entrepreneurs may have better luck cold-pitching their business ideas to investors than even their male counterparts.
They reached this conclusion after sending 80,000 fake pitches to 28,000 venture capitalists and angel investors, each note signed with a name that pointed to the writer’s gender (male or female) and ethnicity (white or Asian). The female personas they used received 8 percent more interested responses from investors, and Asian entrepreneurs received 6 percent more, researchers said. (The team did not send emails from fictitious black or Latino entrepreneurs.)
It’s a refreshing change of pace from the statistics we’re used to seeing from the investment world — that women-run startups only received 2 percent of VC funding in 2018, and women of color get less than 1 percent. Still, as Strebulaev notes, this doesn’t mean that the problem of inequality in investing has been solved. “We know the pipeline is leaky, but we don’t know where,” he says.
Strebulaev continues, “In light of the substantial gender imbalance in real-world investment, one way to interpret our results is that a bias against female entrepreneurs materializes after the initial introductions, perhaps during in-person meetings.” It’s possible, since research reveals that just 15 percent of all VCs are women.
When we sat down with several male investors, they, too, had seen the problem. “The rate [of investment] is so low that it’s hard not to believe there is some failure or dysfunction or — to put it more bluntly — bias,” says Adam Quinton, CEO of Lucas Point Ventures.
What all this means: If you’re able to get your cold-pitch accepted, and you move on to the next stage — which might be an in-person meeting — then emphasize the numbers when you meet with investors.
After all, Quinton notes, “it would be nice to make money and make the world a better place … but I’m just doing it to make money” at the end of the day.