Over the past two years, as a part of the Association for Women in Science’s (AWIS) STEM to Market (S2M) program – an accelerator for STEM-trained women and training program for investors—our team has interacted with some brilliant entrepreneurs. Our participants are bringing innovative and life-changing products to market. Among these are longer-lasting and safer batteries, medical devices to manage chronic respiratory illnesses, and games to teach underserved students how to code.
All the founders in our program have had challenges navigating entrepreneurship culture. One participant was the only woman in her accelerator program, and she was paired with the only female mentor, despite the mentor not having relevant knowledge or connections. On pitch day, the mentor loudly announced to everyone, “Wow, look how far she’s come!” No other team received or subjected to that kind of public feedback. It soured the entire experience for our participant because of the implication about her skill level when they started, in addition to the mentor mismatch.
Another founder found herself passed up during her program’s demo day, despite her fellow founders and program staff giving feedback that her pitch was at the top of the cohort. Who advanced? Teams with white male founders. One thing that might have contributed to that result was that the judges for the competition were all white men.
One of the most powerful experiences for the entrepreneurs in our program was sharing these stories and realizing they reflect patterns of bias and barriers women face in commercialization and entrepreneurship, particularly in STEM products and industries. It makes a huge difference to understand these roadblocks are not personal; they are manifestations of systemic root causes that are changing.
More funders are starting to understand that a failure to innovate and become more inclusive is directly impacting their bottom lines. One fund found that companies with a female founder performed 63% better than their investments with all-male founding teams. Another analysis showed the fastest growing companies at 200%+ growth are 75% more likely to have a female founder. The business case for investing in women-led companies is strong, but investors and accelerator programs still have a lot of work to do.
How can you recognize entrepreneurship bias? Here are some examples:
1. Hiring: Accelerators or investor mentors give advice that results in a biased personnel search for co-founders and first hires. Recommended traits, such as “friendly,” “upbeat,” “agreeable,” “trustworthy,” “fits the culture,” “ambitious,” “leader,” “intelligent,” “focused,” or “stable,” are based on perceptions about a candidate’s personality rather than demonstrated behavior. Personality perceptions can be heavily biased and are often used to rule women and people of color out of candidacy. Instead of hiring based on these traits, founders can take time to think through and document the behaviors, skill sets, and specific criteria necessary for the job to create a more equitable process.
Personality perceptions can be heavily biased and are often used to rule women and people of color out of candidacy.
2. Funding Q&A: Researchers analyzed Q&A interactions at a major annual startup funding competition, and subsequent funding rounds for the startups that launched at the competition. These startups were comparable in terms of quality and capital needs, yet their total amounts of funding raised over time differed significantly: Male-led startups in the sample raised five times more funding than female-led ones.
Venture capitalists posed different types of questions to male and female entrepreneurs. They tended to ask men questions about the potential for gains—promotion–and women about the potential for losses–prevention. The founders who got predominantly failure prevention questions raised an average of $2.3 million, while the entrepreneurs who were asked about future success raised an average of $16.8 million.
3. Leadership skills: Another Harvard Business Review study shows that people are often biased in favor of confidence and not very good at discerning the difference between confidence and competence, which benefits men, harms women, and leads to the promotion of incompetent people. Because people commonly misinterpret displays of confidence as a sign of competence, we are fooled into believing that men are better leaders than women. Manifestations of hubris — often masked as charisma or charm — are commonly mistaken for leadership potential. An extreme example of this is the Fyre Festival disaster, where employees, vendors and investors followed a shady entrepreneur because he seemed like he knew what he was doing, despite their professional experiences telling them that his goals were wildly unrealistic. The same psychological characteristics that enable male entrepreneurs to get funding can also indicate that those founders are not high-quality investments – no wonder angel investing and venture capital is so high-risk!
Because people commonly misinterpret displays of confidence as a sign of competence, we are fooled into believing that men are better leaders than women.
What to make of all this? If you encounter bias while on your STEM entrepreneurship journey, keep in mind it’s because of an entrepreneurship culture that is becoming more inclusive but still has a long way to go. It’s not personal – it certainly feels awful in the moment, but it is less of a reflection on you and more on the funders displaying that bias. And if you have strong feelings, know that you are not alone. Reach out for support to people and organizations (such as AWIS!) that share your values and can help you navigate the situation.
You get to decide how you respond to bias you encounter. You might directly push back on these questions, pointing out the pattern. You might answer the questions you should have been asked. You might opt out of VC altogether, until you can find investors who believe in inclusivity and are constantly working towards that goal. If you don’t feel comfortable thinking through that in the moment, you can get support and coaching, so you are more prepared for whatever comes your way in the future.
Entrepreneurship advice for women often recommends changing your presentation and behavior to be more like that of a (white) man’s. This is nonsense. You can (and should) be your authentic, STEM entrepreneur self; you are your greatest asset and differentiator.
Read more about Stem to Market at www.stemtomarket.org.