TLDR:
- Female founders who are perceived as attractive have an easier time raising funding from investors.
- Female startup founders face greater challenges than male counterparts in raising venture capital due to unconscious biases.
Female founders who are perceived as good-looking find it easier to sell their business ideas and products to potential investors compared to those who are less attractive, according to a study by the Global Center for Entrepreneurship and Innovation at the University of St. Gallen. The study involved 111 male early-stage investors from Switzerland and Germany who were shown a video pitch of the same startup idea presented by different actresses of varying attractiveness. The more attractive founder had a 21-percentage-point higher likelihood of receiving investments and was perceived as more competent by investors, showcasing the “halo effect” in action.
However, female startup founders face greater challenges than male counterparts in raising venture capital due to both conscious and unconscious biases from predominantly male investors. Male-led startups receive nearly 50 times more venture capital than female-led startups, partly because of the male-dominated investor pool. The study also highlighted the importance of understanding these biases to create a fair and equal corporate financing environment. Female entrepreneurs like Friederike Kogelheide have faced biases in their funding journey, emphasizing the need for investors to focus on the product rather than the presenter.
The research underscores the importance of addressing gender inequities in the venture capital industry to foster a more balanced investment environment and ensure fair opportunities for all entrepreneurs.
