Research: Investors Punish Entrepreneurs for Stereotypically Feminine Behaviors

“I would not be caught dead in a pink suit now,” says Susan Perry, the founder of SpeechMED, a startup that translates complex medical information into language patients can understand.

Clothing is just one of the issues Perry has reconsidered when it comes to how she pitches her business. As a middle-aged woman, she has faced bias because she doesn’t fit the stereotype of what an entrepreneur looks like. Raised to be soft-spoken, Perry now makes a conscious effort to lower her voice, plant her feet firmly, and speak directly. When she gets one of the tough, defensive, “prevention-oriented” questions that women entrepreneurs tend to receive from investors, she redirects and instead offers a bold and expansive vision for her company, more in the style of how a man might answer.

Perry’s transition to a more gender-neutral, or even masculine, pitching style seems to be working. Her company completed the Women Innovating Now (WIN) Lab at Babson’s Center for Women’s Entrepreneurial Leadership, was accepted into the gener8tor accelerator program, and is currently gearing up to pitch dozens of investors. Most importantly, she now feels confident about her pitch and her ability to raise money.

We know that women entrepreneurs face significant challenges securing funding from investors. Our research found that only 15% of companies receiving venture capital investment have a woman on their executive team and less than 3% have a woman CEO. Perry’s experiences — and my own years of research on gender and funding — help explain why.

While we often assume women entrepreneurs are discriminated against simply for being women, my research shows that they’re actually penalized for exhibiting stereotypically feminine traits. In fact, men are also at a disadvantage when they display “feminine” behaviors in the pitch room, while women are not penalized if they project more “masculine” behaviors.

A study my colleagues and I recently published found that masculinity and femininity, rather than gender identification (whether someone is a man or a woman), affect how entrepreneurs are perceived by potential investors. In an elevator pitch competition, investors were less likely to select as finalists entrepreneurs who demonstrated stereotypically feminine behaviors like warmth and expressiveness, regardless of their gender.

What’s unique about our study is that it looks at how gender roles and gender stereotypes, as distinct from sex, impact the pitching process. Our findings suggest that it’s not women who have a harder time raising money from investors, it’s anyone who fits certain feminine stereotypes. This is supported by the fact that, as a group, the women in our study were no less likely to receive investor interest than the men. It was behaviors, not gender, that mattered.

While this bias against feminine traits is certainly problematic, being clear on what plays well to investors is something women can use to their advantage. You can’t change your gender, but you can control how you present yourself.

Pitching a business is like any kind of performance — you need to know your audience. The pitch room is a unique environment with its own cultural norms and expectations about what kinds of behaviors are hallmarks of a successful entrepreneur. Just as someone wouldn’t show up to a pitch without a slide deck or proper business attire, it’s critical to take these behavioral norms and expectations into account as well.

That doesn’t mean remaking your personality or the way you express your gender. It simply entails thinking carefully about what sides of yourself you want to emphasize when you pitch. We’re all more or less aggressive, nurturing, assertive, or sensitive in various areas of our life, depending on the role we play in a given situation. Women should consider what might happen if they brought forward certain parts of their persona in the pitch room and left others outside.

Perry doesn’t view adopting a more masculine pitch style as trying to be something she’s not, but instead as uncovering a part of her “natural self.” She’s felt empowered to drop some of the ways society trains women to hold themselves back. “Women are risk takers,” she says, but “we’re sometimes taught that it’s not nice to be seen that way.”

Indeed, research shows that women in many fields face a catch-22 when navigating gender: They are discriminated against for being feminine (which conflicts with the norms of jobs and industries perceived as masculine) but also penalized if they try to act masculine (which contravenes the norms of their gender). Perhaps the most famous example of this phenomenon, known as gender role congruity theory, is when Hillary Clinton was criticized for being too ambitious, aggressive, and cold (all masculine traits) during her presidential runs. Though she was also critiqued as “weak” for exhibiting stereotypically feminine behaviors, people liked her more when she behaved in a manner consistent with her gender.

A number of studies have found that women face this particular bind in areas including politics, management, and corporate leadership. However, our research shows that this dynamic does not apply to entrepreneurs seeking funding. Women in our study were not punished for behaving in more masculine ways; instead, they benefitted by avoiding the penalty that comes with acting feminine. This finding suggests that women don’t need to fear backlash when shifting toward a more bold, assertive approach in their pitch.

This shift should encompass both style and content, for example, having aggressive revenue projections as well as presenting them in a confident way. Perry says, “As women, we want to collaborate and calm people’s fears, but we are not rewarded for that when we’re pitching. We’re rewarded for thinking boldly and being comfortable about risk.”

Access to early-stage capital has been shown to be important, often critical, to startup success, which is why the funding gap between men and women entrepreneurs is so concerning. Yet the strategy of simply having more women investors won’t work if feminine traits are penalized in the pitching context by investors of all genders. In the long run, investors need to broaden their view of what makes a successful business leader and create room for both masculine and feminine entrepreneurs (and those in the middle).

For now, women founders can benefit from having a clearer understanding of what the expectations are when they step into the pitch room and how they can present themselves most effectively.