Dynamics of funding women entrepreneurs - A gendered lens

Abstract

"The start-up ecosystem in India is currently the third largest in the world, trailing only behind USA and China. However, women were founders of 11% of the Indian start-ups. Starkly, only 6% of the funding goes to companies with women as a founder or co-founder and for companies with only women founders, the percentage of the total funding drops to 1.5%. This research primarily explores the role investor biases play in explaining the persistence of the gender gap in accessing funds. Two studies were designed to study investment-biases among the majority of male investors and majority dynamics leading to the marginalization of women's voices among investor groups. Essay 1, an observational field-based study, focused on the nature of linguistic and psycholinguistic patterns of interactions of investors with men and women founders. Textual analysis (LIWC-22) was used to analyse 42 such conversations, and differences were found in expressed emotion, motivational words and stances and social processes toward men and women founders. Essay 2 studied the emergent group dynamics and outcomes of funding decisions for men or women founders in teams with varying numbers of women. A 2 (gender of the founder) *5 (5 compositions of groups) factor experiment was designed. 349 men and 273 women who were part of 122 groups decided on funding either a male or female founder. Significant patterns in team dynamics emerged when women in teams increased. It was found that as the number of women increased, it was better for the women founders. The findings of both essays are discussed in light of the literature on systemic patterns of investor bias at the individual and group level towards women-led ventures. Recommendations to improve the gender funding gap are made."