Investors in tech startups do not trust female founders, according to research by Vienna University of Economics and Business.
The study, conducted by Sonja Sperber and Christian Linder, analysed the overrepresentation of men in tech startups.
They found that there is a lack of female founders in IT-driven startups due to a perception that tech startups are founded by someone that is young, white and male.
This effect plays a huge role in tech-driven startups as the associated business models are seen to have more uncertainties than those in other industries, therefore investors look for ways to compensate for the uncertainty – by going for startups with male founders.
Male founders are seen to be less uncertain than their female counterparts because they fit into this stereotype of what not only a tech startup should be, but any startup.
“Even though the ‘distinctiveness’ of female founders is important for investors, it does not play a crucial role,” said Sperber, from the department of strategy and innovation at WU.
“While female founders need to be as different as possible in order to stand out from the competition, the study suggests that being female already deviates too much from the normative standard.”
She added: “As a result, female founders are not able to prove themselves in the first place because they are simply denied the chance, or the investors’ funding, to do so, regardless of their education or experience.”
The study also found that education or support programs for women – something that politicians, associations and institutions have been promoting for a long time – are not the solution.
This is because the basic problem does not lie in education and training but can be traced back to female founders deviating too much from the stereotype.
Instead, the researchers suggest identifying niche markets in which women are not or less underrepresented, and working to establish an alternative stereotype, which filters into the tech sector.
The study was published in the Journal of Information Systems.