Silicon Valley and found women to be underrepresented in various ways. In 2006, women CEOs led only 4 percent of information technology related business ventures and, as of 2007, women owned less than 5 percent of information technology firms in Silicon Valley. Ku suggested that both human capital and social capital barriers contributed to these gender differences in securing the venture capital that leads to increased entrepreneurship. Specifically, fewer women enter the technology sector and they participate in smaller venture capital networks. Although increasing the number of women in the technical pipeline and increasing their networking options may be solutions to closing the gender gap, Ku suggested that cultural assumptions and double standards may complicate these efforts. Some venture capitalists may question the technical competence of women, which causes them to experience a double standard. Women believe they need to do more as well as make fewer mistakes in order to seem as competent as male counterparts.

Ku and colleagues probed these biases through a social-psychological experiment, in which a real-world business plan was translated into four versions, changing only the biography of the entrepreneur who would be founding the company in two ways; gender and technical experience were varied (male versus female, and computer science versus history backgrounds). All entrepreneurs were described in the business plans as possessing an MBA and six years of relevant experience and were said to have previously been a vice president of a start-up company. Members of the Stanford Business School Entrepreneur Club acted as venture capitalists, assessed the project proposals, and were told that if their results matched those of actual venture capital firms, they would receive greater monetary rewards. The specific aspects of the proposals that club members were asked to evaluate were: the venture, the entrepreneur, and the influence of the founder’s contacts.

Ku found that the gender and technical background of the applicants significantly affected the final decision of the club members. In the evaluations of the venture, the existence of technical backgrounds was influential: products proposed by entrepreneurs with technical backgrounds were rated higher than the products proposed by entrepreneurs with non-technical backgrounds. The presence of a technical background was shown to aid both men and women in the evaluations of the venture with reviewers more likely to request additional meetings, buy the product, or invest in the venture offered by those with technical backgrounds as opposed to those without. Ku suggested that this supports the classic human capital component; an increase in the number of technical women may lead to an increase in the number of female entrepreneurs.

A clear trend was not evident in the evaluations of the entrepreneur. While having a technical background helps both men and women overall, interestingly, when assessing evaluations of the entrepreneurs themselves the picture is more complex. Having a non-technical background caused women to be rated lower than women with technical backgrounds, however, men without a technical background appeared to be rated higher than women without a technical background perhaps because they were perceived to be more savvy. These findings suggest a possible double-standard in the evaluation of human capital.

A further interesting finding was that when women evaluated the entrepreneur, they rated the non-technical women the highest and best able to penetrate the market. Ku suggests that these results support the hypothesis that venture capital firms with female partners are more likely to invest in women-led ventures than firms without female partners. Similarly, the


Capital in Venture Capital Evaluations.” Gender and Society. Submitted for publication at time of this publication. Working paper available upon request.

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