A meta-analysis of the gender gap(s) in venture funding: Funder- and entrepreneur-driven perspectives
Introduction
The association between entrepreneur gender and venture funding has been examined from various disciplinary perspectives, including entrepreneurship, management, finance, and economics. Because of this dispersion, scholars, entrepreneurs, and policy makers alike may have different viewpoints on the gender gap in venture funding. Even within disciplines, the findings are mixed, which may cause even more confusion on what the empirical evidence suggests (Miao et al., 2017). For example, research on traditional funding sources (banks; VCs; angels) has documented that female entrepreneurs face greater challenges than male entrepreneurs do when seeking funding for their ventures (Greene et al., 2001; Haines et al., 1999). However, research in this area has noted that the findings are inconsistent (Alsos et al., 2006) and that business characteristics are the primary driver of funding outcomes (Becker-Blease and Sohl, 2007). Moreover, research on nontraditional funding sources (crowdfunding) has shown that gender differences may be to the advantage of female entrepreneurs (Johnson et al., 2018). Still, results are mixed, with other research suggesting that gender differences are to the advantage of male entrepreneurs (Geiger and Oranburg, 2018).1
Given the dispersion of gender-funding research and the need for informed conversion for research and practice, the current study undertakes a meta-analysis of empirical research on gender-funding associations. The goal is to provide academics and practitioners with some level of consensus on, and insights into, the nature and source of gender differences in funding outcomes. Fig. 1 displays the primary associations of interest.
Section snippets
Theoretical context
The current study takes the position that both funder-driven (supply-side) and entrepreneur-driven (demand-side) perspectives provide meaningful insights into the gender gap in venture funding. A funder-driven perspective is explored using a meta-analytic moderation analysis (a contextual exploration). An entrepreneur-driven perspective is explored using a meta-analytic mediation analysis (a “black box” exploration). With respect to theory, gender homophily is used to anchor the funder-driven
Literature search, filtering, and inclusion criteria
I used Google Scholar in the first literature search to locate published and unpublished studies for the meta-analysis. The term gender was used in combination with funding, finance, loans, debt, equity, and crowdfunding when performing the search. Searches were conducted without specifying an outlet and within specific journals that were likely to have empirical studies for the meta-analysis (Journal of Business Venturing; Entrepreneurship Theory and Practice; Journal of Small Business
Moderator analysis using metafor
The metafor package (Viechtbauer, 2010) in the R statistical platform was used to examine associations related to Exploratory Hypothesis 1. The metafor package is a useful tool for moderator analysis and has been used for examining employee-organization relations (Eisenberger et al., 2019), the effects of HARKing on organizational research (Bosco et al., 2016), and the effects of therapy on cancer patients (Scott et al., 2018; Vora et al., 2016). Indeed, metafor has been a useful tool to
Mediation analysis using metaSEM
Meta-analytic structural equation modeling (MASEM) was used to examine Exploratory Hypothesis 2. This methodology combines traditional meta-analytic procedures with SEM and is particularly useful when exploring the “black box” between variables (Bergh et al., 2016). MASEM has been used in research on turnover (Jiang et al., 2012), employee behavior (Zhao et al., 2007), and firm performance (Bergh et al., 2016).3
Discussion
The findings demonstrate a gender gap in funding amount to the disadvantage of female entrepreneurs across most funding contexts. However, there are some indications of a gender gap in funding success to the advantage of female entrepreneurs. For example, the metafor results suggest that female entrepreneurs are more successful in donation crowdfunding contexts. Moreover, the metaSEM analyses suggest that female entrepreneurs need less funding for their business, which is fully mediated by the
Conclusion
To conclude, the perspectives and findings in this paper suggest that both funder-driven (supply-side) and entrepreneur-driven (demand-side) mechanisms play a role in creating the gender gap(s) in venture funding. I hope the insights presented provide motivation for more research and informed discussion on the gender gap(s) in venture funding.
Author statement
Mark Geiger: Conceptualization, Methodology, Software, Validation, Formal Analysis, Investigation, Data Curation, Writing - Original Draft, Writing - Review & Editing, Visualization, and Project administration.
Declaration of competing interest
The author of “A meta-analysis of the gender gap(s) in venture funding: Funder- and entrepreneur-driven perspectives” certifies that there is no conflict of interest to declare.
References∗,† (182)
- et al.
Microfinance and gender: is there a glass ceiling on loan size?
World Dev.
(2013) - et al.
Persuasion in crowdfunding: an elaboration likelihood model of crowdfunding performance
J. Bus. Ventur.
(2017) - et al.
The effect of entrepreneurial rhetoric on microlending investment: an examination of the warm-glow effect
J. Bus. Ventur.
(2013) Influence of gender and financing on tourist company growth
J. Bus. Res.
(2013)- et al.
Editorial: enhancing quantitative theory-testing entrepreneur research
J. Bus. Ventur.
(2019) - et al.
Narcissistic rhetoric and crowdfunding performance: a social role theory perspective
J. Bus. Ventur.
(2018) - et al.
The power of positivity? The influence of positive psychological capital language on crowdfunding performance
J. Bus. Ventur.
(2018) - et al.
Human capital, investor trust, and equity crowdfunding
Res. Int. Bus. Finance
(2019) - et al.
Do women-owned businesses have equal access to angel capital?
J. Bus. Ventur.
(2007) - et al.
Growing the roots of STEM majors: female math and science high school faculty and the participation of students in STEM
Econ. Educ. Rev.
(2015)
The career reasons of nascent entrepreneurs
J. Bus. Ventur.
Discontinuance among new firms in retail: the influence of initial resources, strategy, and gender
J. Bus. Ventur.
Entrepreneur opportunity costs and intended venture growth
J. Bus. Ventur.
Gender differences in full-time self-employment
J. Econ. Bus.
Does one size fit all? Exploring the relationship between attitudes towards growth, gender, and business size
J. Bus. Benturing
Funders’ positive affective reactions to entrepreneurs’ crowdfunding pitches: the influence of perceived product creativity and entrepreneurial passion
J. Bus. Ventur.
Social influence in career choice: evidence from a randomized field experiment on entrepreneurial mentorship
Res. Pol.
Are early stage investors biased against women?
J. Financ. Econ.
Female entrepreneurs and equity crowdfunding in the US: receiving less when asking for more
J. Bus. Vent. Insights
The ambitious entrepreneur: high growth strategies of women-owned enterprises
J. Bus. Ventur.
The Yin and Yang of entrepreneurship: gender differences in the importance of communal and agentic characteristics for entrepreneurs’ subjective well-being and performance
J. Bus. Ventur.
Signaling by early stage startups: US government research grants and venture capital funding
J. Bus. Ventur.
The role of economic and normative signals in international prosocial crowdfunding: an illustration using market orientation and psychological capital
Int. Bus. Rev.
A woman’s place is in the… startup! Crowdfunder judgments, implicit bias, and the stereotype content model
J. Bus. Ventur.
Decision biases and entrepreneurial finance
Small Bus. Econ.
Meta-analytic choices and judgment calls: implications for theory building and testing, obtained effect sizes, and scholarly impact
J. Manag.
Signaling in equity crowdfunding
Enterpren. Theor. Pract.
Do women pay more for credit? Evidence from Italy
J. Eur. Econ. Assoc.
New venture financing and subsequent business growth in men–and women–led businesses
Enterpren. Theor. Pract.
Endogeneity and entrepreneurship research
Financing of small businesses: are mars and venus more alike than different?
Ventur. Cap.
Social identity theory and the organization
Acad. Manag. Rev.
Don’t pitch like a girl!: how gender stereotypes influence investor decisions
Enterpren. Theor. Pract.
Gender gaps in equity crowdfunding: evidence from a randomized field experiment
Essays on Financial Constraints, Export, and Entrepreneur Gender in Latin America
Gender and banking: are women better loan officers?
Rev. Finance
The effect of gender diversity on angel group investment
Enterpren. Theor. Pract.
Using meta analytic structural equation modeling to advance strategic management research: guidelines and an empirical illustration via the strategic leadership-performance relationship
Strat. Manag. J.
Dynamics of lending-based prosocial crowdfunding: using a social responsibility lens
J. Bus. Ethics
Imagining stereotypes away: the moderation of implicit stereotypes through mental imagery
J. Pers. Soc. Psychol.
Discrimination in the small business credit market
Rev. Econ. Stat.
HARKing’s threat to organizational research: evidence from primary and meta-analytic sources
Person. Psychol.
Microcredit: an answer to the gender problem in funding?
Small Bus. Econ.
Why we plan: the impact of nascent entrepreneurs’ cognitive characteristics and human capital on business planning
Strat. Entrepreneurship J.
Investors prefer entrepreneurial ventures pitched by attractive men
Proc. Natl. Acad. Sci. Unit. States Am.
Signaling in venture capitalist—new venture team funding decisions: does it indicate long–term venture outcomes?
Enterpren. Theor. Pract.
Industry specificity and the effect of internal social capital in reward-based crowdfunding
Kicking off social entrepreneurship: how a sustainability orientation influences crowdfunding success
J. Manag. Stud.
Applied Meta-Analysis for Social Science Research
The financing of male–and female–owned businesses
Enterpren. Reg. Dev.
Cited by (15)
Entrepreneurial alertness: A meta-analysis and empirical review
2023, Journal of Business Venturing InsightsInformation signals and bias in investment decisions: A meta-analytic comparison of prediction and actual performance of new ventures
2023, Journal of Business ResearchCitation Excerpt :Many researchers, while reviewing this niche literature using qualitative methods, suggested an inconsistency in the effect of information signals on such investment decisions and asked to explore the source of bias for future studies (Colombo, 2021; Vazirani & Bhattacharjee, 2021). Only a few literature reviews have used the quantitative approach of meta-analysis to explore the significance of information signals in such investment decisions, but the scale was limited to a single signal (Geiger, 2020). Furthermore, no work has explored the presence of bias in investors’ consideration of information signals using quantitative methods.
The gendered effects of effectuation
2023, Journal of Business ResearchCitation Excerpt :From a practice standpoint, investors should consider evaluating an entrepreneur's use of effectuation (Schmidt et al., 2018), especially if the founder is female. This may aid in the effort to correct inequalities women experience in raising financial capital (Brush et al., 2014; Geiger, 2020; Malmström et al., 2020). Effectuation logic enables female entrepreneurs to utilize their resourcefulness and focus on cooperation, collaborations, transformation of their initial means into strategic resources, and resource sharing.
Attracting the crowd in online fundraising: A meta-analysis connecting campaign characteristics to funding outcomes
2022, Computers in Human BehaviorCitation Excerpt :Searches were also performed by specifying the names of popular online fundraising platforms (GoFundMe, Kickstarter, Kiva, Indiegogo, Seedr, Smava). The reference section of recent studies was also reviewed if it was likely to provide a list of empirical and quantitative studies related to online fundraising (e.g., Geiger, 2020). In addition, given the recent surge in crowdfunding studies, the literature was monitored during the development of the full manuscript to identify new and in-press publications.
Standing out in crowdfunded microfinance: A topic modeling approach examining campaign distinctiveness and prosocial performance
2021, Journal of Business Venturing InsightsCitation Excerpt :First, we contribute to the rapidly growing literature concerning how the narrative content of crowdfunding campaigns can influence campaign performance (Allison et al., 2013, 2017; Anglin et al., 2018b; Chan et al., 2020) and provide an important step forward in furthering our understanding of the rich and nuanced relationship between the stories that founders create and the ultimate performance of prosocial campaigns. Second, we build upon and extend the ongoing conversation regarding the role that gender might play within the crowdfunding process (Geiger, 2020; Geiger and Oranburg, 2018). Specifically, we provide further evidence that illustrates efforts to either conform to, or contradict with, accepted gender norms can have a complex association with prosocial funding performance, and that these relationships can be made even more complicated by industry influences.
Hustlers, hipsters and hackers: Potential employees’ stereotypes of entrepreneurial leaders
2021, Journal of Business Venturing Insights
- †
Indicates a study used in metaSEM mediator analysis displayed in Tables 3 and 4.