The Gender Gap in Start-up Funding: The Role of Investors’ Benevolent Sexism

Abstract

Female-led ventures tend to receive lower funding than male-led ventures, but the reasons for this gap require further attention and understanding. Drawing on the ambivalent sexism theory, we examine the effect of investors’ benevolent sexist attitudes – their affection, idealization, and protectiveness toward women – on funding allocations for female- and male-led ventures. Specifically, we postulate that the more investors endorse benevolent sexism the less they are likely to view female-led ventures as viable, which, in turn, undermines funding allocations. Our findings in two experimental studies show that investors’ benevolent sexism differentially impacts entrepreneurial outcomes of female- and male-led ventures, but in a slightly different manner than theorized. In Study 1 using a sample of undergraduate business students with entrepreneurial experience, we found that participants’ benevolent sexism was related to greater viability perceptions for male-led ventures, but unrelated to viability perceptions of female-led ventures. In turn, these greater viability perceptions for male-led ventures were associated with higher funding allocation. In Study 2, using a sample of potential non-accredited investors in the US general public we found that this pattern of results was stronger among male than female investors. This research demonstrates that benevolent sexism subtly undermines gender equality in entrepreneurship by giving an advantage to male-led ventures, while the same advantage is not conferred to female-led ventures. We discuss implications for theory, practice, and male-centric approaches to the study of gender equality.