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Venture Capitalists Expect Future Successful Entrepreneurs to Look Like Recent Successful Entrepreneurs



(p. 4) In recent months, the fund-raising atmosphere has cooled as venture capitalists react to the poor stock market performance of some public tech companies and question whether the recent fast pace of investment is sustainable. Venture capitalists are making fewer investments at lower valuations.

"There is this delusion that it's easy to raise money in Silicon Valley," said Sam Altman, president of Y Combinator, a mentorship and investment program for start-ups. "Raising money is incredibly hard."


. . .


Venture capitalists, who hold the keys to success in Silicon Valley by providing start-up money, are even more likely to be white and male than tech company employees are. Theirs is an insular business. Most investors accept pitches only from entrepreneurs who come through an introduction, and they tend to finance people who have succeeded before, or who remind them of those who did.

According to a 2014 study published by the National Academy of Sciences, investors prefer pitches by men, particularly attractive men, to those by women, even when the content of the pitch is the same. In addition to studying the results of three entrepreneurial pitch competitions, the researchers conducted two experiments in which a representative sample of working adults heard identical pitches in male and female voices. Sixty-eight percent of people preferred to finance the company when it was pitched by a male voice, while 32 percent chose the female.


. . .


At the gender discrimination trial last year against Kleiner Perkins Caufield & Byers, which the venture capital firm won, female employees said they were excluded from a ski trip, denied credit for deals they brought to the firm, and told they both didn't speak up enough and talked too much.

"I feel like it's a lot more nuanced and sometimes it's subconscious," said Julia Hu, the founder and chief executive of Lark, which makes a health and weight-loss app. "V.C.s are pattern matchers, and they're just used to seeing men like themselves."

Many women convey confidence and leadership in a different way than men do, she said. As an Asian woman, she said, she was raised to be humble and quiet and felt uncomfortable promoting her skills. "To try to be who I thought they wanted me to be, which was another Mark Zuckerberg, was actually very difficult for me without feeling inauthentic."



For the full story, see:

Miller, Claire Cain. "The Venture Capital Ceiling." The New York Times, SundayBusiness Section (Sun., FEB. 28, 2016): 1 & 4-5.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 27, 2016, and has the title "What It's Really Like to Risk It All in Silicon Valley.")


The National Academy of Sciences study mentioned above, is:

Wood Brooks, Alison, Laura Huang, Sarah Wood Kearney, and Fiona E. Murray. "Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men." Proceedings of the National Academy of Sciences of the United States of America 111, no. 12 (March 25, 2014): 4427-31.






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