Scooper - Technology News: Why aren't venture capitalists backing female entrepreneurs?
Why aren't venture capitalists backing female entrepreneurs?
As the tech industry continues to come under fire for its dearth of women, the gender gap in venture funding has important implications for the lack of diversity in Silicon Valley. And since high-tech is a key driver of economic growth, markedly lower levels of women entrepreneurs pose a threat to overall national competitiveness, according to Ethan Mollick , a professor of management at Wharton.
In the Era of the Lilly Ledbetter Fair Pay Act, and at a time when Sheryl Sandberg's Lean In remains a blockbuster bestselling mantra of female empowerment, Corporate America has never been so enlightened about the issue of gender inequality in the workplace . Women represent 50% of the labor force, but when it comes to money and power, women have very little of either one. Women, on average, earn less than men in nearly every single occupation for which there is sufficient earnings data, according to the Institute for Women's Policy Research. In 2015, female full-time workers made only 79 cents for every dollar earned by men.
There are many reasons why women don't receive their share of VC funding and interest. One explanation is that women don't start businesses that look like typical VC-backed businesses. Women-founded businesses tend to be smaller and in lower growth industries like retail or food, rather than technology. (Vivoom's Hays is a case in point.) Of the women who do start businesses, there is evidence that suggests they are less apt to ask for things like venture funding — which obviously results in them receiving less. According to a Kauffman Foundation survey of nearly 350 female tech startup leaders , 80% used personal savings as their top source of funding in starting a new business.
One explanation for this may be the male hubris, female humility effect. Men have more hubris — meaning they tend to be superbly confident in their abilities. Women, meanwhile, in addition to having a lower hubris, also have higher levels of humility, meaning that they are less likely to attribute their success to their own talents and resourcefulness. They are also are less likely to take advantage of that success .