Editor’s note: This post was republished with permission from the Ewing Marion Kauffman Foundation’s Growthology blog.
Women’s entrepreneurship is a topic that has been focused on here at Growthology, as well as at the Kauffman Foundation more broadly. Women are significantly underrepresented in entrepreneurship. Despite their strong representation in the labor market and their increasing graduation rates in higher education, women remain half as likely as men to become an entrepreneur.
A recent article by The New York Times highlights the case of Nathalie Miller and the particular challenges women face as entrepreneurs. Ms. Miller is an aspiring entrepreneur who left her job at another startup to pursue the dream of launching her own. She created Doxa, a website she hoped would help women navigate corporate America and make more informed employment decisions. Yet, she, like many women before her, struggled to claw through the familiar barriers women face as entrepreneurs.
All entrepreneurs and their companies face an uphill battle to succeed. But for women, this hill is steeper. Women are consistently unable to secure funding at the same rates as men. Women must also satisfy inconsistent and amorphous standards of behavior that investors and others demand, as well as balance motherhood, family life, and the health of their business in ways men are not asked to do. Understanding these unique challenges and potential ways to combat them is the focus of the Kauffman’s State of the Field’s topic on gender.
Ms. Miller was aware of the challenges facing women, both in the startup and corporate world. This was part of her motivation to create Doxa in the first place. However, as she struggled to find investors, be considered equal compared to male-owned startups, and balance a pregnancy, she found the hurdles too high to clear.
After talking to more than 40 investors and working 70 hour weeks, Ms. Miller was unable to secure the funding she needed. Coupled with the departure of her software engineer partner, she decided to put her startup business on hold.
The article points out ways that securing capital can prove more difficult for women entrepreneurs. First, venture capitalists are “more likely to be white and male than tech company employees are” and tend to “accept pitches only from entrepreneurs who come through an introduction,” which can exacerbate the lack of diversity. Second, the article also cites a study that found that:
“Investors prefer pitches by men, particularly attractive men, to those by women, even when the content of the pitch is the same. In addition to studying the results of three entrepreneurial pitch competitions, the researchers conducted two experiments in which a representative sample of working adults heard identical pitches in male and female voices. Sixty-eight percent of people preferred to finance the company when it was pitched by a male voice, while 32 percent chose the female.”
State of the Field research shows that women access capital at lower rates than men, although this has improved in recent years. A 2014 study found that “between 2011-2013 more than 15 percent of the companies receiving venture capital investment had a woman on the executive team.” State of the Field research also shows that woman are less likely to participate in businesses that require outside capital investment.
When Ms. Miller went to her first meeting with a mentor to coach her through securing investment, she was in “jeans and a sleeveless shirt.” This was the culture and uniform of the startup where she previously worked. Her mentor immediately stressed that “the standard is different for women.” If she wanted to be taken seriously, she needed to dress more professionally, not like Mark Zuckerberg.
Women entrepreneurs face the challenge of cultural stereotypes, outlined in research featured on State of the Field, where entrepreneurship is “linked to personality traits stereotypically associated with men and masculinity.” Investors, and the public in general, often assume that successful entrepreneurs are men.
In some ways, this dress code hypocrisy highlights these stereotypes, where women need to dress more professionally for their startup ventures to be taken seriously as investment opportunities for venture capitalists.
When working to secure funding for her startup, Ms. Miller tried to put off telling investors she was pregnant, only doing so after they agreed to a second meeting with her. She tried to sell her pregnancy by assuring investors that she would take little time off and that her husband would be the primary caregiver. However, after the birth of her baby, Ms. Miller better understood the workload parenting demanded. Ms. Miller said “she had an entirely new perspective on how undervalued caregivers are, and how people judge women for taking time off work for their families.” Her “transition from start-up founder to employee and mother had given her a new perspective on success in Silicon Valley and, more broadly, on what her generation wanted from work, something she wanted to address in her new job.”
State of the Field highlights research that echoes Ms. Miller’s challenge of securing a work-life balance. For women entrepreneurs, there is a “common assumption that women will [continue to] carry greater responsibility for caregiving, regardless of their employment status.” Women are more likely than men to be motivated by the flexibility and adaptability that entrepreneurship can provide to families, but “these gendered dynamics within families have also been shown to influence who takes the lead in an entrepreneurial team.”
Emily Fetsch is a research assistant in Research and Policy for the Ewing Marion Kauffman Foundation, and assists in the processing of new grants including grant research, grant write-ups, setting deadlines, and reviewing financials. She also assists in writing literature reviews and informative briefs, and conducts quantitative and/or qualitative analysis on the economy, policy, and entrepreneurship.