Not only do Venture Capitalists prefer entrepreneurial pitches from male presenters, but they also tend to favour those from handsome males. According to a specific Harvard study, the gender and physical attractiveness of the entrepreneurs themselves are central criteria for investors to choose an entrepreneurial venture. However, the main criteria for investment decisions are usually the business proposition of the entrepreneur as well as the previous experiences of the person aspiring to start a business.
Attractive Male Entrepreneurs Outperform Their Female Counterparts
The researchers who conducted three entrepreneurial pitch competitions and two controlled experiments in the US, found that angel investors preferred pitches coming from male entrepreneurs compared to pitches presented by female entrepreneurs, even when the content of the pitch was the same. This finding suggests that male presenters who are physically attractive are often deemed persuasive, logical and fact-based. Physical attractiveness did not matter among female entrepreneurs.
In numbers, male entrepreneurs were 60% more likely to win a pitch competition than were their female counterparts. On the contrary, only 31.7% of investors chose to fund the ventures whose pitches were presented by females.
Interestingly, the report notes that "among the male entrepreneurs, there was wide and significant variation across levels of attractiveness on pitch success”. This implies that entrepreneurial opportunities are unevenly spread even within the male population.
Women May Remain Underrepresented in the Entrepreneurial Economy
Fiona Murray, one of the authors of the report notes that “women-led businesses probably only receive between 5% and 10% of all the venture capital that’s allocated to startups in their very earliest in their growth phases”. Considering that getting financial backing is one of the most important phases before starting up a business, we should start questioning the potential of women’s success in the field of entrepreneurship.
The results of the research indicate a gender gap in entrepreneur persuasiveness which is governed by male physical attractiveness. This fact in turn may marginalise women in the world of startups, discouraging them from creating and constructing innovative ventures that would positively impact on the local economy and society.
All in all, it seems that investors should judge entrepreneurs on the basis of more objective criteria (such as their history of achievements, quality of business idea, feasibility of business plan etc) rather than merely on their persuasive skills. To do so, they should thoroughly probe entrepreneurs’ background and skill set to make an informed decision about the suitability of the candidate and his idea.
On the other hand, it is the entrepreneur’s responsibility to pitch their business idea properly, by getting introduced personally to angel investors and trying to prove that they have the know-how and the characteristics to run a business successfully.