We Recorded VCs’Conversations and Analyzed How Differently They Talk About Female Entrepreneurs

Updated: Apr 20, 2021

Written by Malin Malmström, Jeaneth Johansson, and Joakim Wincent

Published by Harvard Business Review

When venture capitalists (VCs) evaluate investment proposals, the language they use to describe the entrepreneurs who write them plays an important but often hidden role in shaping who is awarded funding and why. But it’s difficult to obtain VCs’ unvarnished comments, given that they are uttered behind closed doors. We were given access to government venture capital decision-making meetings in Sweden and were able to observe the types of language that VCs used over a two-year period. One major thing stuck out:

The language used to describe male and female entrepreneurs was radically different. And these differences have very real consequences for those seeking funding — and for society in general.

Before discussing our research, it’s worth proving a bit of context about government venture capitalists, which rank among the most significant financial sources for entrepreneurship. In the European Union, government VCs allocated €3,621,000,000 to finance innovation and growth in small and medium-sized businesses from 2007 to 2013. Worldwide, government venture capital is important for bridging significant financial gaps and supporting innovation and growth, as VCs can take risks where banks are not allowed to. When uncertainty is high regarding the assessment of product and market potential, for example, the assessment of the entrepreneur’s potential becomes highly central in government VCs’ decision making.

In Sweden, about one-third of businesses are owned and run by women, although they are not granted a corresponding proportion of government funding. In fact, women-owned businesses rec