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Study: When it comes to raising funds, men and women must pitch differently

When you’re an aspiring entrepreneur, your venture pitch is the most critical component of a fundraising process. You will need to attend high-stakes meetings filled with people who have the pocketbooks to turn your idea into a reality.

What can you say to help your case? A new study in Organizational Science has found that how you frame your pitch can be just as important as the business you’re pitching. Unfortunately, this same study found that women entrepreneurs must clear a higher bar in how they frame their pitches. If you’re a woman entrepreneur, you are more likely to get funding if you emphasize your venture’s social mission, while men are not expected to do the same.

Women need to sell ‘social impact’ to get funding

In general, the chances of getting funding as a women founder are dispiriting. Out of the 43 ventures and 421 evaluations that researchers at INSEAD and Harvard Business School looked at, they found that women entrepreneurs’ ideas were seen as less viable than their male counterparts.

But the researchers found that, regardless of the gender of the evaluator hearing the pitch, women founders stood a better chance of getting positively evaluated if they emphasized their business’ social impact. By heavily emphasizing their venture’s social mission, they could offset some of the gender biases of evaluators.

Citing research on how women need to be seen as warm to be seen as competent, the researchers theorize that this tactic works because talking about social good increases the perceived personal warmth of the female entrepreneur. The women-led businesses that framed their pitch as a social mission were perceived to be warmer in evaluation scores, the researchers found. Male entrepreneurs were not seen as warmer when they did the same tactic.

This gender bias is part of an ongoing problem in business. If you’re a woman entrepreneur, your competence will, unfortunately, face more scrutiny. One study found that venture capitalists would question women’s business skills — their credibility, knowledge, and experience — more than they did for male entrepreneurs. Men were more likely to get the benefit of the doubt. They would get praised as “young and promising” while women would get qualifiers like “young, but experienced.”

Don’t use this as a crutch

But the researchers do not want your only takeaway to be that you need to sell your product as a world savior to get funding. The long-term solution is not an individual’s burden to bear, but a structural issue in how societies do not see enough women as business leaders.

“Social impact framing may help to mitigate the effects of gender-based discrimination in the short-term, but it is unlikely to change the stereotypes that underlie discrimination, and may even reinforce them,” the researchers wrote in Harvard Business Review. “To solve the larger issue of gender discrimination, entrepreneurs, investors and others in the entrepreneurship ecosystem will all need to continue confronting some very deeply-held biases.”

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