Gender bias and discrimination towards women entrepreneurs by venture capitalists–a randomized response survey

Abstract

Women entrepreneurs bring unique innovations to markets by addressing neglected needs but face significant challenges in raising financial capital, particularly venture capital, which men investors predominantly allocate. Gender bias exacerbates this issue, though its severity remains unclear. Using a sensitive questioning technique that ensures complete respondent anonymity and mitigates social desirability bias, we surveyed 361 international venture capitalists to quantify the disadvantage women entrepreneurs face. Results show that 26.9% of respondents believe women’s participation in founding teams is overrated, 15.3% consider women poor entrepreneurs, and 11.9% admit they would not invest in women-led ventures. These biases are most pronounced among men investors, those in seed-stage funding, and corporate venture capitalists. By quantifying the extent of gender bias, our study builds on literature that primarily documents the problem without detailing its scope. Addressing the funding gap requires fostering mixed-gender investment teams by changing venture capitalists’ mindsets and increasing the presence of women in venture capital.