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  • This is me at five years old,

  • shortly before jumping into this beautifully still pool of water.

  • I soon find out the hard way that this pool is completely empty

  • because the ice-cold water is near freezing

  • and literally takes my breath away.

  • Even though I already know how to swim,

  • I can't get up to the water's surface, no matter how hard I try.

  • That's the last thing I remember trying to do before blacking out.

  • Turns out, the lifeguard on duty had been chatting with two girls

  • when I jumped in,

  • and I was soon underwater,

  • so he couldn't actually see or hear me struggle.

  • I was eventually saved by a girl walking near the pool

  • who happened to look down and see me.

  • The next thing I know, I'm getting mouth-to-mouth

  • and being rushed to the hospital to determine the extent of my brain loss.

  • If I had been flailing at the water's surface,

  • the lifeguard would have noticed and come to save me.

  • I share this near-death experience because it illustrates

  • how dangerous things are when they're just beneath the surface.

  • Today, I study implicit gender bias in start-ups,

  • which I consider to be far more insidious than mere overt bias

  • for this very same reason.

  • When we see or hear an investor

  • behaving inappropriately towards an entrepreneur,

  • we're aware of the problem

  • and at least have a chance to do something about it.

  • But what if there are subtle differences

  • in the interactions between investors and entrepreneurs

  • that can affect their outcomes,

  • differences that we're not conscious of,

  • that we can't directly see or hear?

  • Before studying start-ups at Columbia Business School,

  • I spent five years running and raising money for my own start-up.

  • I remember constantly racing around to meet with prospective investors

  • while trying to manage my actual business.

  • At one point I joked that I had reluctantly pitched

  • each and every family member, friend, colleague, angel investor

  • and VC this side of the Mississippi.

  • Well, in the process of speaking to all these investors,

  • I noticed something interesting was happening.

  • I was getting asked a very different set of questions than my male cofounder.

  • I got asked just about everything that could go wrong with the venture

  • to induce investor losses,

  • while my male cofounder was asked about our venture's home run potential

  • to maximize investor gains,

  • essentially everything that could go right with the venture.

  • He got asked how many new customers we were going to bring on,

  • while I got asked how we were going to hang on to the ones we already had.

  • Well, as the CEO of the company, I found this to be rather odd.

  • In fact, I felt like I was taking crazy pills.

  • But I eventually rationalized it by thinking,

  • maybe this has to do with how I'm presenting myself,

  • or it's something simply unique to my start-up.

  • Well, years later I made the difficult decision to leave my start-up

  • so I could pursue a lifelong dream of getting my PhD.

  • It was at Columbia that I learned about a social psychological theory

  • originated by Professor Tory Higgins called "regulatory focus,"

  • which differentiates between two distinct motivational orientations

  • of promotion and prevention.

  • A promotion focus is concerned with gains

  • and emphasizes hopes, accomplishments and advancement needs,

  • while a prevention focus is concerned with losses

  • and emphasizes safety, responsibility and security needs.

  • Since the best-case scenario for a prevention focus

  • is to simply maintain the status quo,

  • this has us treading water just to stay afloat,

  • while a promotion focus instead has us swimming in the right direction.

  • It's just a matter of how far we can advance.

  • Well, I had my very own eureka moment when it dawned on me

  • that this concept of promotion

  • sounded a lot like the questions posed to my male cofounder,

  • while prevention resembled those questions asked of me.

  • As an entrepreneurship scholar,

  • I started digging into the research on start-up financing

  • and discovered there's an enormous gap

  • between the amount of funds that male and female founders raise.

  • Although women found 38 percent of US companies,

  • they only get two percent of the venture funding.

  • I got to thinking:

  • what if this funding gap is not due to any fundamental difference

  • in the businesses started by men and women?

  • What if women get less funding than men

  • due to a simple difference in the questions that they get asked?

  • After all, when it comes to venture funding,

  • entrepreneurs need to convince investors of their start-up's home run potential.

  • It's not enough to merely demonstrate

  • you're going to lose your investors' money.

  • So it makes sense that women would be getting less funding than men

  • if they're engaging

  • in prevention as opposed to promotion-oriented dialogues.

  • Well, I got the chance to test this hypothesis

  • on companies with similar quality and funding needs across all years

  • at the funding competition known as TechCrunch Disrupt

  • Startup Battlefield has run in New York City

  • since its inception in 2010.

  • TechCrunch is widely regarded as the ideal place for start-ups to launch,

  • with participants including start-ups that have since become household names,

  • like Dropbox, Fitbit and Mint,

  • presenting to some of the world's most prominent VCs.

  • Well, despite the comparability of companies in my sample,

  • male-led start-ups went on to raise five times as much funding

  • as the female-led ones.

  • This made me especially curious to see what's driving this gender disparity.

  • Well, it took a while,

  • but I got my hands on all the videos of both the pitches and the Q and A sessions

  • from TechCrunch, and I had them transcribed.

  • I first analyzed the transcripts

  • by loading a dictionary of regulatory-focused terms

  • into the Linguistic Inquiry and Word Count software called LIWC.

  • This LIWC software generated the frequencies

  • of promotion and prevention words in the transcribed text.

  • As a second method,

  • I had each of the questions and answers manually coded

  • by the Tory Higgins Research Lab at Columbia.

  • Regardless of the topic at hand,

  • an intention can be framed in promotion or prevention.

  • Let's take that topic of customers I mentioned briefly earlier.

  • A promotion-coded question sounds like,

  • "How many new customers do you plan to acquire this year?"

  • while a prevention-coded one sounds like,

  • "How do you plan to retain your existing customers?"

  • During the same time,

  • I also gathered background information

  • on the start-ups and entrepreneurs that can affect their funding outcomes,

  • like the start-up's age, quality and funding needs

  • and the entrepreneur's past experience,

  • so I could use these data points as controls in my analysis.

  • Well, the very first thing that I found

  • is that there's no difference in the way entrepreneurs present their companies.

  • In other words, both male and female entrepreneurs

  • use similar degrees of promotion and prevention language

  • in their actual pitches.

  • So having ruled out this difference on the entrepreneur's side,

  • I then moved on to the investor's side,

  • analyzing the six minutes of Q&A sessions

  • that entrepreneurs engaged in with the VCs after pitching.

  • When examining the nearly 2,000 questions

  • and corresponding answers in these exchanges,

  • both of my methods showed significant support

  • for the fact that male entrepreneurs get asked promotion questions

  • and female entrepreneurs get asked prevention questions.

  • In fact, a whopping 67 percent of the questions posed

  • to male entrepreneurs were promotion-focused,

  • while 66 percent of those posed to female entrepreneurs were prevention-focused.

  • What's especially interesting

  • is that I expected female VCs

  • to behave similarly to male VCs.

  • Given its prevalence in the popular media and the venture-funding literature,

  • I expected the birds-of-a-feather theory of homophily to hold here,

  • meaning that male VCs would favor male entrepreneurs

  • with promotion questions

  • and female VCs would do the same for female entrepreneurs.

  • But instead, all VCs displayed the same implicit gender bias

  • manifested in the regulatory focus of the questions they posed

  • to male versus female candidates.

  • So female VCs asked male entrepreneurs promotion questions

  • and then turned around and asked female entrepreneurs prevention questions

  • just like the male VCs did.

  • So given the fact that both male and female VCs

  • are displaying this implicit gender bias,

  • what effect, if any, does this have on start-up funding outcomes?

  • My research shows it has a significant effect.

  • The regulatory focus of investor questions

  • not only predicted how well the start-ups would perform

  • at the TechCrunch Disrupt competitions

  • but also how much funding the start-ups went on to raise in the open market.

  • Those start-ups who were asked predominantly promotion questions

  • went on to raise seven times as much funding

  • as those asked prevention questions.

  • But I didn't stop there.

  • I then moved on to analyze entrepreneurs' responses to those questions,

  • and I found that entrepreneurs are apt to respond in kind

  • to the questions they get,

  • meaning a promotion question begets a promotion response

  • and a prevention question begets a prevention response.

  • Now, this might make intuitive sense to all of us here,

  • but it has some unfortunate consequences in this context of venture funding.

  • So what ends up happening

  • is that a male entrepreneur gets asked a promotion question,

  • granting him the luxury to reinforce his association

  • with the favorable domain of gains by responding in kind,

  • while a female entrepreneur gets asked a prevention question

  • and inadvertently aggravates her association

  • with the unfavorable domain of losses by doing so.

  • These responses then trigger venture capitalists' subsequent biased questions,

  • and the questions and answers collectively fuel a cycle of bias

  • that merely perpetuates the gender disparity.

  • Pretty depressing stuff, right?

  • Well, fortunately, there's a silver lining to my findings.

  • Those plucky entrepreneurs who managed to switch focus

  • by responding to prevention questions with promotion answers

  • went on to raise 14 times more funding

  • than those who responded to prevention questions

  • with prevention answers.

  • So what this means is that if you're asked a question

  • about defending your start-up's market share,

  • you'd be better served to frame your response

  • around the size and growth potential of the overall pie

  • as opposed to how you merely plan to protect your sliver of that pie.

  • So if I get asked this question,

  • I would say,

  • "We're playing in such a large and fast-growing market

  • that's bound to attract new entrants.

  • We plan to take increasing share in this market

  • by leveraging our start-up's unique assets."

  • I've thus subtly redirected this dialogue into the favorable domain of gains.

  • Now, these results are quite compelling among start-ups that launched at TechCrunch

  • but field data can merely tell us that there's a correlational relationship

  • between regulatory focus and funding.

  • So I sought to see whether this difference in regulatory focus

  • can actually cause funding outcomes

  • by running a controlled experiment

  • on both angel investors and ordinary people.

  • Simulating the TechCrunch Disrupt environment,

  • I had participants listen to four six-minute audio files

  • of 10 question-and-answer exchanges

  • that were manipulated for promotion and prevention language,

  • and then asked them to allocate a sum of funding

  • to each venture as they saw fit.

  • Well, my experimental results reinforced my findings from the field.

  • Those scenarios where entrepreneurs were asked promotion questions

  • received twice the funding allocations

  • of those where entrepreneurs were asked prevention questions.

  • What's especially promising

  • is the fact that those scenarios where entrepreneurs switched

  • as opposed to matched focus when they received prevention questions

  • received significantly more funding from both sets of participants.

  • So to my female entrepreneurs out there,

  • here are a couple simple things you could do.

  • The first is to recognize the question you're being asked.

  • Are you getting a prevention question?

  • If this is the case, answer the question at hand by all means,

  • but merely frame your response in promotion

  • in an effort to garner higher amounts of funding for your start-ups.

  • The unfortunate reality, though,

  • is that both men and women evaluating start-ups

  • display the same implicit gender bias in their questioning,

  • inadvertently favoring male entrepreneurs over female ones.

  • So to my investors out there,

  • I would offer that you have an opportunity here

  • to approach Q&A sessions more even-handedly,

  • not just so that you could do the right thing,

  • but so that you can improve the quality of your decision making.

  • By flashing the same light on every start-up's potential

  • for gains and losses,

  • you enable all deserving start-ups to shine

  • and you maximize returns in the process.

  • Today, I get to be that girl

  • walking by the pool,

  • sounding the alarm

  • that something is going on beneath the surface.

  • Together, we have the power to break this cycle

  • of implicit gender bias in start-up funding.