Photo: Greta Scholderle Moller
According to a 2017 Harvard Business School paper, the American dream of starting your own business is not equally shared by everyone.
Surveying data between 1990 and 2016, Harvard researchers found that 6% of technology startups backed by venture capital are owned by women.
When you break it down by race, the numbers get show even more divisions: Latinos own only 2% of all VC-backed startups, and African-Americans own less than 1%.
The problem, researchers suggested, is that the people in the room making decisions about women-owned startups predominantly aren’t women. 91% of venture capitalists, the people who will fund dreams, are men.
That makes a big difference. Through a process known as “homophily,” we hold inherent biases that favor people who look and act like us, researchers said. That bias locks women out of potential networking and mentoring opportunities. Only 19% of top executives are women and a Lean.org and McKinsey report said that mentorship prevents more women from joining their ranks.
That means that the lack of women-owned businesses is not for lack of trying by women. There are many trained and skilled women studying innovation. More than 50% of people getting engineering and science bachelor’s degrees are women, according to the survey.
Recognizing our secret biases
Few people set out to discriminate by gender, but biases can creep in even among the smartest and most capable people. If you feel ready to tackle yours, here’s how to start. And remember: bias against women has been shown to be perpetuated by men and women alike, so we could all use a look inside.
1. How do you evaluate women’s performance?
A separate study on Swedish venture capitalists looked into gendered decision-making in the room where it happens. In face-to-face discussions on final funding decisions, they found that the VCs questioned women’s entrepreneurship abilities—their credibility, knowledge and experience— more than they did for a male entrepreneur.
What the study showed: investors would describe a man as “young and promising” and a woman as “young, but experienced.”
2. How deep is your bench?
After researchers presented their findings to the Swedish government, it led to new structural-level strategies on how to better distribute government VC funds.
On a management level, one obvious solution to closing the gender gap is to get women into the pipeline to bring up other women behind them. Female venture capitalists were more likely to invest their time and money into female entrepreneurs, the Harvard study found.
3. Cast a wide net
And if you’re a woman entrepreneur getting the door shut in your face, you’ll need to be proactive about seeking out role models, mentors, and networking opportunities for yourself. And that means casting a wide net beyond your personal circle and finding male and female mentors through social media, conferences, and “coffee?” emails.
The founder of Care.com, Sheila Lirio Marcelo, told The New York Times, that that’s what she did: “Closing the gender gap in business is often a conversation that women have with other women…We absolutely need to provide a supportive community for each other, but if we’re truly going to level the playing field, men have to be part of the equation.”
Working Mother recommends not limiting yourself to just one mentor. Mentors can’t fix and evaluate your career, and one may be better at advising you on negotiating deals than getting a promotion. The trick is to build a wide support network of people who can help you in any scenario. One study found that women who made it to the top of the corporate ladder had more long-term mentors than men.