Venture Investors Prefer Funding Handsome Men

Studies by Alison Wood Brooks and colleagues reveal that investors prefer pitches from male entrepreneurs over those from female entrepreneurs, even when the content of the pitches is identical. And handsome men fare best of all.
by Carmen Nobel

If you're in search of startup funding, it pays to be a good-looking guy.

A series of three studies reveals that investors prefer pitches from male entrepreneurs over those from female entrepreneurs, even when the content of the pitches is identical. Attractive men are the most persuasive pitchers of all, the studies show.

The findings are detailed in the paper Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men, published in the March 2014 Proceedings of the National Academy of Sciences.

"Our paper provides concrete proof that gender discrimination exists in the context of entrepreneurial pitching," says Alison Wood Brooks, an assistant professor at Harvard Business School who coauthored the paper with Laura Huang, an assistant professor at the Wharton School of the University of Pennsylvania; Sarah Wood Kearney, a visiting scholar at the MIT Sloan School of Management; and Fiona E. Murray, associate dean of innovation at Sloan and Kearney's thesis adviser.

“Our paper provides concrete proof that gender discrimination exists in the context of entrepreneurial pitching”

As a behavioral psychologist, Brooks studies the situational variables that influence personal persuasion. Kearney, her twin sister, is an entrepreneur and scholar whose research is fueled by both a frustration with and curiosity about the dearth of venture capital for women. (In the first half of 2013, companies with at least one female founder secured some 13 percent of total venture funding, up from 4 percent in 2004, according to data from PitchBook.) Murray is Kearney's thesis adviser. Huang, whom Brooks met in the initial stages of their research, studies the role of "gut feel" in investment decisions.

The Guys Have It

In their first study, the research team examined video recordings of 90 randomly selected pitches from three real-life entrepreneurial pitch competitions, held in various United States locations over a three-year period. In each case, a panel of angel investors had judged the pitches and awarded startup capital to the winners.

Click on image to enlarge
Click to enlarge image.

The researchers recruited a separate panel of 60 seasoned angel investors to watch the videos and code them across several measures, including physical attractiveness—rating the entrepreneurs on a scale of 1 (very unattractive) to 7 (very attractive). The coders were blind to the actual competition results.

The analysis showed a significant relationship between an entrepreneur's gender and whether a pitch had been successful. Male entrepreneurs were 60 percent likelier to receive a funding prize than were female entrepreneurs. Among those male entrepreneurs, investor-deemed attractiveness led to a 36 percent increase in pitch success. But for female entrepreneurs, their looks had no apparent effect on the success of their pitches.

The second study was an experiment designed to isolate the effect of gender on pitch persuasiveness. The researchers used 521 participants to watch two entrepreneurial pitch videos online. In each case, one of the pitches had won funding in real life. Participants in the experiment, roughly half of whom were women, were tasked with guessing the actual winner, with the incentive of a monetary reward for a correct guess.

The pitches included still images and a voiceover narration by the entrepreneur. This format enabled the researchers to assign a gender to the entrepreneur—dubbing in a male voice for some videos and a female voice for others, while the content of the narrations remained identical.

All else being equal, 68.33 percent of participants favored ventures pitched by male voices, while only 31.67 percent chose female-voiced pitches. Importantly, the gender effect held steady regardless of the "investor's" gender.

"We saw the same discriminatory effects between male and female participants," Brooks says.

In the third study, 194 participants each watched only one pitch video. As in the previous study, the researchers manipulated the gender of the voiceover each time. Additionally, they accompanied each video with a photo, which varied according to a scientific scale of physical attractiveness. "We manipulated attractiveness using four faces: one high-attractiveness and one low-attractiveness female face, and one high-attractiveness and one low-attractiveness male face," Brooks explains. "We used photos that had been used in previous research and validated as highly attractive or unattractive, and we also ran our own pilot study to ensure that the faces uniquely manipulated attractiveness."

Each participant rated the investment potential of the venture on a scale of one to seven. As with the previous studies, participants awarded higher ratings to pitches with male voices—deeming the male pitches more "persuasive," "fact-based," and "logical" than otherwise identical female pitches. Additionally, the participants preferred pitches from the "high-attractiveness" male entrepreneurs over those from "low-attractiveness" men. But looks had no significant effect on whether female-voiced entrepreneurs fared well.

Next Steps And Lessons Learned

In the secondary stages of their exploration, the researchers plan to dive deeper into gender dynamics. Among the questions they are pursuing: What happens when the female entrepreneur is perceived as stereotypically masculine vs. feminine? Is a female entrepreneur more likely to be funded if her business targets female customers? Will a successful track record increase a woman's chances of securing capital?

Brooks is hardly shocked by the results of the studies thus far. "I was surprised to find the effects consistently across both field and lab settings," she says. "But, in general, I find our results to be more sad than surprising."

Still, she's hopeful that the research provides a wake-up call to the venture capital industry.

"Awareness is a critical first step," Brooks says. "Though gender in entrepreneurship has become a hot topic (Sheryl Sandberg's wonderful Lean In and Ban Bossy campaigns, for example), we haven't seen much concrete data on the topic until now. We hope this research leads investors and entrepreneurs to become more supportive of male and female entrepreneurs alike."

About the Author

Carmen Nobel is the senior editor of Harvard Business School Working Knowledge.

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    • Eleanor Latimer
    • retired
    It's taken this long for this fact to be declared? My goodness, I could have told the researchers this 30 years ago when I was attempting to launch a healthcare start-up. It was clear even during the following decades that venture capitalists and angel investors rarely found merit in ideas put forth by women (can't speak about less attractive men vs more attractive men), not only from my own experience but that of a number of other female entrepreneurs who were also stymied.
    Thank you for conducting this study. I hope it helps change a few perceptions.
    • Susanne
    • Entrepreneur
    While it's discouraging only 22.67% of the investors studied were gender-blind, as a female entrepreneur seeking funding, what I'd like to know is what were the common attributes among investors who were willing to invest equally in women and men?

    Did these investors tend to be younger/older, male/female, fathers of daughters, etc? Were they more focused on seed or later stage financing? What about assets under management? What did they study undergrad - engineering? Etc.

    I cannot control my gender or perceived attractiveness, but I can control who I pitch to.

    Research focused on proving that discrimination against women exists is, as Brooks says, "more sad than surprising."

    Research focused on identifying how and where women can be successful is Working Knowledge that's empowering.

    I wish HBS would focus its research and communications more on success, and less on telling us the world is stacked against us.
    • Eslam Ayoub
    • Manager
    Makes sense :)
    • Wade Woodson
    • Former venture investor
    After many years in the venture industry, I believe that attractive people do receive some level of preference. Whether due to biology or Hollywood, our society is excessively tilted toward attractive people of either gender, giving them an edge in leadership and salesmanship. Since professional investors are economic realists, I think they tend to amplify any societal bias, fair or unfair, that will create business advantage for the startup.

    Attractiveness bias is common in so many areas of culture and business that its influence should be no surprise and is instead a distraction from the real issue.

    The question of gender bias in capital allocation is a very important one. Too few women seek, and too few receive, startup financing. A better understanding of the reasons and trends might help women entrepreneurs and reduce the disparity.

    With regard to further research, please keep in mind that studies based on the behavior of angel investors provide small value in understanding the behavior of the professional venture capital community on a question like this. Independents investing their own wealth as it suits them operate under very different influences than full-time professionals who are subject to shared decision-making and accountable to their own investors' professional investment managers.
    • April Klimley
    • Consultant and writer and teacher, Klimley communications
    Is this such a surprise? Watch the Oscars. They can't seem to give that award to anyone who is an elderly woman or homely. Our patriarchal society slants things and remains on such a superficial level. I am surprised that you need to do studies on this. The female entrepreneurs of all time were not funded by angels. They did it on their own.
    • Ann
    • blogger,
    Maybe this isn't discrimination. Maybe the ones doing the funding know that men, after having been funded, will have an easier time in accomplishing the next step. Therefore, all things being equal, fund the one with the best chances of giving the investor a good ROI in a shorter time frame.

    Reminds me of adoption: bio mom wants the kid but has no money and no partner so she is urged to give the kid to a family that can give it a good home. We could fund her, for her little start up, it belongs to her, but we don't. We give the kid away to a "better" home, just like investors give their money to a home perceived to be a better fit for something to thrive.

    Sad scenarios, both of them. I do my own gender testing all the time. I often use a gender neutral screen name (that is likely to be seen as more male than female) on a controversial topic. Gender neutral me is always treated much better and with more respect than female name me.
    • A. Chisholm
    • Development
    Obviously an attractive male is perceived as having the package but good looks on a female not only compromises her perceived intelligence but conspires against her in meaningful business dealings. Similar to if professional men have children, they are celebrated and patted on the back but if professional women with children are always suspect of their abilities. The more things change, the more they stay exactly the SAME!!
    • Alfred A. Porro, Jr.
    • Co-Ordinator, FIU/BHSF, Consortium on Moral Conscience
    Our focus is on Professions, Business, and Careers. We have revealed a substantial female "gap" - a solution: having more women at the forefront of family, church and temple, civic, educational, and non business groups and activities has seemed to be a subtle method of breaking the female "prison". Like it or not - the mere disclosure of the "gap" and more laws penalizing "Gap Goers" only impacts in a negative manner. The process - not the "beefing" works. God Bless, Al
    • Cole Lechleiter
    • Human Performance Consultant
    This is quite a sentence for females and less-than-attractive males. Or are we relying too much on the that phrase in the article -- that the "content" of the pitches were indeed all "identical"?
    The reality of an entrepreneur presenting a pitch is not simply a rather masculine- or feminine-looking face looming while unfeeling "content" transmits from looming face to the judging investor. The experience is between somewhat unique individuals rife with inflections of pitch and motion, of posture and pause.
    The research presented here doesn't make it clear that the researchers were sensitive to (and appropriately controlled for) variances in vocal quality and nonverbal behavior in what famed communication researcher Albert Mehrabain might have called the most important 93% of communication! If you are the investor, for example, you should expect to feel differently hearing: "We DO have interesting RESULTS!" versus "We do...have INTERESTING...results..."
    In other words, how did the researchers control for the variation of individual performance in vocal quality and body language?
    But honestly if I had to guess, and even if the researchers appropriately controlled for the nonverbal individual performance of the entrepreneurs, one would likely still observe a similar difference between sex/gender and attractiveness (disclosure: I did not assess the methods used to control for "identical content" directly from the original research by Brooks).
    Bias and discrimination are not new aspects of research. But neither are performance development and adaptation. I urge interested researchers such as Brooks to consider more thoroughly examining and characterizing the individual performance and behavioral factors associated with the outcome effects associated with the group cohorts identified here. Once the research team can say, for example, "the most effective ways the moderately attractive female cohort improved outcomes were by: 1) reducing overall spoken word rate by increasing total duration of pauses between phrases, and 2) intentionally lowering vocal pitch at the end of pre-determined key statements", the business community now has the potential for change in the original problem.
    I hope this criticism encourages researchers in this field to approach research questions such that the subject cohorts gain insights on factors they can change, not those they were born with.
    • Kapil Kumar Sopory
    • Company Secretary, SMEC(India) Private Limited
    Gender considerations are not observed to have much relevance in India at least. It surprises me that in US the other important factors seem to have become secondary in investment decisions. If good personality is the major success factor, decision making can be faulty and lead to losses.
    All decisions need, therefore, to be taken after a detailed cosideration of all the basic and important parameters.
    • Prof S. Davis
    • STEM/Life science prof, BCCC
    This is a great article. I have gone to tech pitch events in NYC where I was the only woman. I have been trying to raise funding for my biochemical lab company for 3 years. Many of the companies run by white men did not even have business plans but they received money. They did not have to prove they knew their subject matter. Many did not need multiple degrees.
    • Michael Saunby
    • Open Innovation Manager, Met Office
    Ann's 'better home' hypothesis is well worth further study. For example if investors were actually told the idea came from a man or woman but would be progressed by the man/woman giving the pitch would it matter? Maybe men are seen as better guardians of the status-quo and women might change things too much - but I'm guessing.
    • Peter
    (a) Physical attractiveness of a man indicates he is ready to do battle and overcome obstacles and enemies. Physical attractiveness of a woman has a totally different meaning. The German chancellor Dr. Angela Merkel (according to Forbes the most influential woman in the world) is ready to fight any time and has been reelected twice already, the Germans love her, but nobody would call her physically attractive.
    (b) The voice reveals much: For instance, how you are breathing and why; your level of stress and cortisol; your level of anxiety, fear and confidence; your muscle tonus and tensions in your body; your determination and resolve; your readiness to do battle; your warmth or lack thereof. If you didn't learn to "read" a voice as a child, 10 years of practicing martial arts, singing in a choir and conducting high-stakes negotiations help.
    You might try to consider and measure what the voice reveals before coming to conclusions.