Earlier this year I chaired a panel about female entrepreneurship at IE University’s LegalTech event in London. The discrepancies in venture capital funding to female entrepreneurs are well known, but society also tends to view men as more creative and innovative than women, even when the reality is quite the opposite. Indeed, this bias tends to emerge by the time children are three years of age.
Starting a business is hard enough, with estimates of around 90% of startups failing at some point, but for female entrepreneurs, matters are even harder still. The following are three unique challenges they are forced to overcome by societal biases.
The beauty premium
With venture capital strongly biased towards (white) men, it’s perhaps no surprise that (white) men tend to be those backed most often by the industry. The halo effect also highlights how our physical appearances influence how we’re treated, with beautiful people typically regarded as more capable than their more average looking peers.
Research from the labor market has found this is particularly pronounced for women, with low levels of perceived attractiveness corresponding to a 4% fall in earnings. Those who were perceived as being more attractive tended to earn 10% more than those with more average looks, with the researchers suggesting that looks were associated with higher confidence, efficiency and ’emotional stability’.
The findings chime with previous research, which shows that ‘beautiful people’ receive better job evaluations and are generally more employable. A potentially important caveat however, is that this beauty premium may be relative, as research suggests customers don’t like engaging with beautiful customer service staff as it reduced the psychological closeness they felt with them.
Given that so many venture investors are male however, the matter is complicated still further, as previous research suggests that most VCs prefer pitches by beautiful men. Indeed, unattractive women tended to get backing (slightly) more than attractive women.
Confused? You should be, but what does appear clear is that a meritocratic environment this is most definitely not.
Ethical standards
Speaking of fairness, in many startup environments, entrepreneurs are flying by the seat of their pants, and so taking calculated risks is almost part of the territory. Entrepreneurial lore is full of stories of entrepreneurs flying close to, and sometimes crossing, the line of what’s acceptable, but new research reminds us that such behaviours are not viewed the same way for male and female risk takers. The study found that people were less likely to back a company after an ethical failure if that company was led by a woman.
“Our study found that consumers’ trust in, and willingness to support, an organization after a failure varied based on the gender of the organization’s leader and the type of incident,” the researchers explain. “Women incur greater penalties for ethical transgressions because of persistent gender stereotypes that tend to categorize women as having more communal traits than men, such as being more likable, sensitive and supportive of others. Even in leadership settings, women are still expected to be more communal than their male counterparts.”
The researchers believe their findings have very clear implications, both for women in salaried careers but also for entrepreneurs. Both involve taking risks and being evaluated on one’s performances, but this is perhaps even more so for entrepreneurs where risk taking is such a big part of daily life.
Putting the hours in
Another fundamental aspect of entrepreneurial life is the intensely long hours that are often required to make a startup succeed. With money and other resources often limited, time is something that entrepreneurs have to commit in order to give their business the best chance to succeed.
Societal attitudes towards making such a commitment are not equal however, especially after people have children. For instance, research has shown that when a couple have children, the fathers tend to do well at work as their employer implicitly assumes that they will work extra hard to support their family, whereas the mothers are punished as employers assume that their priorities will be elsewhere.
This is supported by recent research showing the clear divergence of career paths for men and women after childbirth, with just over 25% of women still in full-time work or self-employment three years after childbirth, which compares to 90% of new fathers. What’s more, twice as many men receive either a promotion or a superior job in the years after childbirth than women do.
“The results of our study highlight how gendered employment patterns are following childbirth, with men typically remaining in full-time work and women leaving full-time work,” the researchers say. “Worryingly, it appears that women who return to employment typically see their chance of moving up the occupational ladder decrease. Women who return to the same employer risk becoming stuck in their job roles with limited career progression.”
All of which underlines the fact that society is far more accepting of men putting in the super long hours often required in a startup than we are of women, especially if children are involved.
The United Kingdom has the largest entrepreneurial gender gap in the G7, and some of the societal biases against female entrepreneurship play a role in this divide. While the government has pursued various policies to develop support networks of female entrepreneurs, and to make access to finance easier, it’s clear that there is still a long way to go before we reach entrepreneurial parity, not least because many of those who do make use of such resources drop out due to the difficulties highlighted above.
If entrepreneurship is something that societies want to encourage among both men and women, then these cultural barriers must be overcome to create the kind of level playing field entrepreneurs desperately need in order to thrive.
