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Having a Woman On Your Team Ruins Your Chances For VC Funding (theoutline.com)
Laura June, writing for The Outline: It's a well-known, well-documented fact that women entrepreneurs face an uphill battle in the fight to get funding for their businesses. But a new study suggests that it can actually be almost impossible. According to the study, published Tuesday in the journal Venture Capital, having even one woman on a company's team makes them far less likely to get funding than an entirely male one. In fact, an all male team is about four times more likely to get funding than teams with any women on them. The study was done by researchers at Babson College and Wellesley, and looked at data on 6,793 companies funded between 2011 and 2013. This is the first large-scale study in a decade to focus on women's efforts to get funding, and it's not encouraging. The authors write, "We did not determine any significant performance differences between companies with women CEOs from companies with men CEOs, so it is quite surprising that women are still, practically speaking, shut out of the market for venture capital funding, both as CEOs and participants of executive teams."
The idea isn't that people are consciously putting sexism in front of profits but rather that they are unconsciously allowing sexism to cause them to underestimate their potential profits.
I have only read through the paper's methodology section and conclusion so far, but it appears they didn't look at the total number of pitches by companies with at least one woman founder. They only looked at companies which did receive funding. Their study therefore says nothing about whether women on your founding team has anything to do with whether you will get funding. It just says there are less women founders.
This isn't just a case of the article having a misleading title. The study itself makes conclusions it cannot back up.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
They only used companies that got funding and ignored the composition of companies that requested funding but never got it.
Based on that you might as well say this study shows that companies with a women in lead position comes up worse ideas then a team of all men.
There's plenty bad you can say about Vulture Capital companies, but not that they're bad about correlating past chances for a startup to become profitable with various pieces of data about those startups, especially data that is easy to measure.
If they noticed that teams that include women are statistically non-negligibly less likely to succeed, they will use that knowledge. They don't care that you have a poontang instead of a wang, they care about what has historically been proven to give better chances of profit.
The creatures outside looked from Alt-Right to Antifa; but already it was impossible to say which was which.
Misleading summary and conclusion from a website that with a subtitle of, "Did we ban men yet."
Direct quote from the study:
The average dollar investment in businesses with a woman on the management team was slightly higher for all three years during 2011â"2013, $12 million for those with women, $8 million for those with no women.
Please stop posting BS gender issues on slashdot once and for all... It's not tech news, it's not nerd news, it's not news you want to hear, it's not even a news... It's just BS.
There is about 96% male CEOs so their companies gets about the same percentage of the funding. WHAT A SURPRISE...
And don't tell me somebody in western countries is forbidding women to create their own businesses or denying funding for good businesses, because it was woman's idea...
Can we please get some good submissions on the front page today?
This one is pretty much just political, meant to agitate leftists and get them to post a lot of angry comments about "sexism".
The one before this one was about transsexuals in the US military. Again, it was meant to agitate leftists and get them to post a lot of angry comments about "transphobia".
The one before that one was about Americans avoiding vaccines. Yet again, it was meant to agitate leftists and get them to post a lot of angry comments about "anti-vaxxers".
I know, I know. Some will claim it's done to generate controversy, which generates page loads, which generates ad views. That argument never made sense to me, as most of us here are probably smart enough to block ads outright, or if some embedded ones do slip through, we just ignore them.
Can we have relevant articles on the front page, please? Ones having to do with science, technology, math, computing, electronics, and stuff like that which we can't get from other news sources?
Can we not be subjected to these petty identity politics? If we wanted to argue about "sexism" or "transphobia" or "anti-vaxxers" we could just go to a site like Huffington Post or Reddit.
There are lots of good Firehose submissions about truly interesting topics that don't involve -isms or -phobias or identity politics. Editors, let's get some of those on the Slashdot front page, ok?
We come here to discuss open source software, programming languages, Linux, tinkering with electronics, and to learn about new scientific discoveries. We don't come here for leftist identity politics.
The opposite should be true. After all, the "woman are wonderful effect" is very well known. Both men and woman have an unconscious pro-bias towards woman as well. Ranging from social to material interests. But you can look all over society and find cases where this isn't true because of the problems it brings.
And those problems? You can thank false allegations, socjus, fake sexual harassment, cases like this or Ellen Pao and the ability of a woman to destroy your career and life over a false claim. I'll bet that nearly every person that reads this comment and is currently working in a corporate environment of some kind has seen the shift where men leave doors open, or have one or more individuals in the same room with them when talking to a woman. There's a reason for it.
And it's to the point where that even if proven false in the court of law that a man's choices are commit suicide or try to work through it, by picking up and moving to another part of the world to try and start over. It's not worth the trouble, and this is a result of people trying to limit and protect themselves from a potential fallout. I'm sure someone is going to bring up a "but it really doesn't destroy them..." No? Find anyone who's been the subject of a false claim, and you'll find a person who's lost friends, family, career, connections, and are ostracized even when innocent, the person recanted, or was dismissed by the courts with prejudice against the accuser.
Om, nomnomnom...
The issue (if it is one at all as you'd want to look for confounding factors to control for before leaping to a judgement) should be self-correcting. Assume for the sake of argument that all ventures are equally good regardless of the sexes of the team or that from a funding perspective they all have equally good returns. Investors who don't discriminate on sex would be able to get greater returns because there are fewer other VCs that want to invest so they can negotiate a better deal. Since the returns are just as good, those investors make more money and other investors start to adopt their investment strategy.
It really only takes one to figure that out and the market corrects. Of course not all projects are equal, so there is a question as to whether or not women are more disposed to be parts of projects that don't have as good of return potential as men.
I suppose I could read the study myself to see if this was done or attempted.
VCs might like to know they likely have a blind spot when it comes to good investments. They might also like knowing that their fellow investors likely are undervaluing some companies based on entirely illogical criteria. As TFS notes, performance wise outside of VC funding, there's no difference. There are probably VCs who are only interested in investing in companies run by dudes, but I'm guessing there are probably some VCs who are more interested in making money than maintaining a gender imbalance.
If VCs don't care about making wise decisions with their money, they can. Looks to me like no one is suggesting otherwise. I don't think anyone is suggesting they shouldn't be able to put their balls in a blender either. It's their genitals and they can do with them what they want. Definitely.
A better comment than mine was already posted by an AC. However, the other point here is that, the mechanisms you are describing require time to take effect. If people of a particular gender or nationality were available cheaper, exploiting the arbitrage would close it and the problem would self-correct. But lots of data says that this hasn't happened. Clearly this arbitrage is, in many areas, *closing* but that isn't the same as *closed*. So the conclusion is either that (a) there really are differences between genders and races that make one more valuable than the other or (b) the natural forces that you describe take a long time to take effect. I tend to think it's the latter. If I'm a highly profitable sexist and racist company, I can stay that way for a *long* time. Eventually market conditions may change where somebody with better employees can eat my market share. But until then, I'm coming along making high returns (maybe not as high as if I weren't racist/sexist) and perpetuating discrimination. I think you are right that these forces will *eventually* close the arbitrage but the time frame will be longer than the lifetime of those currently in the work force.
You are operating under the assumption that people (or even a subset of people) are rational. Here's a simple test: does "gut" instinct play any part at all in your decision making processes? If so, you are at least to some degree irrational. Don't feel bad, you have lots of company: the rest of the human race.
If you look at the historical efforts of venture capitalists, you have to conclude that they're as irrational as anyone else. What injects realism into the process is failure. The thing is, having a bias against female team members doesn't necessarily result in failure. It results in narrowed opportunity for success, but if the rational aspects of the VCs decision processes bias those decisions enough to success, he'll still make money, and he'll feel completely vindicated in his mistaken belief in his rationality.
It's a case of the dog that didn't bark -- in this case the investment that you didn't take that would have made you a ton of money. However, now that this is out, it's possible that some smart VCs will start looking for undervalued opportunities. It will only be a matter of time before we have our first female rock star tech entrepreneur, and that will change things.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
According to the study, it's the exact opposite:
"Are there differences in performance outcomes between male and female entrepreneurs funded by venture capital?
When looking at outcome measures, we see that company valuations are significantly and consistently higher for companies with a woman on the team than those with no women."
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Cause it is.
Biased, post hoc ergo propter hoc nonsense.
They didn't do a comparison of probability for a company to get VC funding based on the presence of women.
They didn't compare companies which received VC funding vs. those that didn't.
They just took all the VC funded companies and counted ones with women listed on the company profile.
It's a literal post hoc condition for determination of likelihood of receiving VC funding.
As for bias... From the study:
The Global Entrepreneurship Monitor (GEM) reports that in 2013 approximately 13% of the working population of the United States was in the process of starting or running a new business - the rate for women was 11% compared with 16% for men (Kelley, Brush, Greene, and Y. Litovsky 2013 Kelley, D., C. Brush, P. Greene, and Y. Litovsky. 2013.
The Global Entrepreneurship Monitor Women's Report. Wellesley, MA: Babson College. [Google Scholar]). This means that one out of every 10 women in the United States was becoming an entrepreneur, which is a higher rate of female entrepreneurship than for any of the other 24 developed economies.
Disregarding the fact that they are confusing "one out of every 10 women in the United States" with 11% OF the 13% OF the working population... in the process of starting or running a NEW business.
People who write biased crap can't do math. Big surprise there.
But their criteria for VC funding female teams is "a single female on the team".
In other words, their sample will look a LOT like that 11% mentioned in the cited study, as it doesn't discriminate between the teams with a single woman, teams with more women or teams with one or more women starting or running a business which is not new, but only seeking VC funding for the first time.
Cause they are going out of their way to find a proof of "women being bad luck on the ship".
Number of VC funded companies, according to the study, with at least one women on the company profile in that same year (2013)? 18%.
2012 - 13%.
2011 - 9%
I.e. Percentage of companies with women on the team receiving VC funding is actually higher than the percentage of women in the process of starting or running a new business.
It's even higher than the percentage of ALL population starting or running a new business.
Only thing they got right is that there are MORE COMPANIES WITH WOMEN.
But that's not the idea they want to get behind.
See... there's this patriarchy thing...
Mit der Dummheit kämpfen Götter selbst vergebens