It is well known that there is a significant gender gap in high-growth entrepreneurship. The persistence of this gap over time runs counter to more general labor market trends. Several potential explanations have been proposed, including gender differences in technical training or risk preferences. However, many have also speculated that part of the gender gap may, in fact, be due to a lower propensity for investors to fund female entrepreneurs seeking capital. This view largely stems from the fact that over 90% of venture capitalists (VCs) are men. In this article, we directly examine whether female entrepreneurs are at a disadvantage in raising capital due to their gender and if so, why.
To examine these questions, in our article we use a proprietary data set obtained from AngelList, a popular online platform that connects investors with seed-stage startups. Companies create profiles on AngelList describing their businesses and founding teams. They can then start a fundraising campaign wherein they specify the amount of capital they are trying to raise along with other desired deal terms. Accredited investors—both angels and VCs—can register on the platform and subsequently connect with companies seeking funds,