Digital Innovation & Entrepreneurship
and female avatars to pitch to 178 venture capital investors. Using avatars made the pitches equivalent on factors such as tone and mannerisms and allowed us to test which combination of gender and framing worked best. Our findings demonstrate that hyping works better for men. De-risking – which emphasises validation, proof, and feasibility – works better for women. Investors trusted more female founders who de-risked than those that hyped and were more willing to meet them for a follow-up. So much so that the disadvantage faced by female founders was cut by more than half. This may offer a partial solution for female founders, at least in the short-term. Women benefit from presenting ambitious growth plans in a measured way, showing that thorough testing has been done, possible outcomes considered, and risks identified. As investors get to know the founders over time, hype may become less important, as a While further testing is required for conclusive findings, the emerging patterns suggest that female and male investors have different preferences. Interestingly, female investors tended to favour female founders who de-risked and male founders that hyped. Male investors, on the other hand, seemed to prefer de-risking overall. The reason for this is unclear and worth investigating. Could male investors be more alert to ‘hype’ language and more vigilant in evaluating it? reputation is established. 2 Tailor your pitch to the investor.
These patterns suggest it is worth tailoring a pitch depending on the gender of the investor. This applies to male founders as well, with female investors more receptive to hyping by male entrepreneurs. Women should persist with de-risking framing overall, and especially when pitching to female investors. 3 Timing is key. We would advise women to provide more reassurance and evidence early in the pitch to pre-empt critical questioning later. Research shows that when this is not done, female founders receive more questions related to risks and losses than male founders during the Q&A. This needs to be avoided to maintain focus on promoting the business idea, so close out those critical questions before they arise. But while investors approved of early de-risking, they also emphasised that founders needed to go with a big opportunity story and warned female founders that too much de-risking may be perceived as lacking ambition. This means there could be an optimal balance between focusing on de-risking and emphasising a big opportunity story, which could be the winning combination for women. There are other factors to consider. For example, evidence from the British Business Bank suggests that warm introductions can help female founders secure investment. Variations in investors’ cultural or ethnic background may also have an effect.
Further research is needed to test how this might affect investment decisions. This is undoubtedly a subject that warrants further investigation. After all, securing venture capital is a vital step in the growth of many start-ups. Developing a stronger understanding of investor preferences, biases, and behavioural patterns will help founders to maximise their chances of success. 4 Don’t hang back. The good news is this: when women do get funded, they tend to build strong, successful businesses. This isn’t about a lack of great ideas – it’s about access to capital. In fact, research shows that female-led ventures often outperform male-led ones when they receive investment. When women are underfunded, capital isn’t flowing to the best opportunities. This also shapes what gets built. Women are more likely to innovate in underserved markets and areas like women’s health, meaning that when their ideas are overlooked, entire segments of innovation are left behind. And when there are fewer funded female founders, there are fewer visible role models. That can discourage the next generation from stepping forward. The takeaway is simple: don’t hold back. If you’ve got a strong idea, go for it. The ventures that do get funded show just how much value is waiting to be unlocked.
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