Isabelle Solal and Kaisa Snellman's research reveals a startling truth: female-led startups backed solely by female investors are twice as likely to struggle securing future rounds, due to attribution bias.
Investing in female-led startups has become a hot topic in the venture capital world, but new research reveals that it's not all good news. In a study of over 2,000 venture-backed firms in the US, women-led startups that received their first round of funding solely from female investors were found to be two times less likely to secure a second round. The reason? Attribution bias.
When potential investors see that a female founder has only been backed by female investors, they attribute her investment success to her gender instead of her competence, resulting in them perceiving her as less competent. While female investors may be more responsive to female founders, and establish a supportive mentorship, female-led startups need male investors to grow.
For female entrepreneurs seeking long-term success, given research suggests raising at least some capital from male investors from the start.
Full Story: HERE (HBR)
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