Investors are less likely to fund a startup the moment they realize it’s run by women, according to data by document-sharing startup DocSend


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Secure document-sharing platform DocSend has been analyzing pitch decks — the slideshows used to convince investors to invest in a startup.

Through an opt-in program involving hundreds of startups and thousands of investors, the company analyzed how investors “read” those presentations in terms of how long they spent on each slide, and whether or not they went back to give parts of the deck a second look.

Interestingly, the study, which was released Thursday, found that the decks that investors sped through were the ones most likely to get funded, DocSend said.

“A good deck is one where people are just like ‘flip, flip, flip, makes sense, makes sense, makes sense, done. I guess we’re going to do this,'” DocSend CEO Russ Heddleston told Business Insider. 

But when an investor lingers on the slide about a company’s financials or team page, it’s a bad sign.

And according to DocSend’s data, a trigger for this behavior is when they reached a slide revealing a startup is entirely led by women.

“They’re like ‘Oh, all women?'” Heddleston said. “They’ll flip back to the traction page, and they’ll sit there being like, ‘Do they really have this traction? What does that traction mean?'”

The difference between how all-female versus all-male teams were treated by investors is stark. Investors spent 50 percent more time analyzing the “transaction section” of female team’s pitch decks. They spent 24 percent more time reading the “product” slides of all-women teams. And they spent 30 percent less time on the slides of all-women led startups where they asked for funding, the one slide where more time spent usually translates into getting funded.

The data was drawn from decks from over over 465 startups seeking funding during a period from 2018 to 2019. Those decks were viewed by 6,248 unique visitors at investor offices and venture capital firms. Most of the companies were seeking funding for seed and pre-seed rounds. The startups then submitted funding information results as part of the study and DocSend cross checked that info with funding database Crunchbase.

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The results of the research rang true to Nikki and April Dominguez, sisters who founded Handsome, an Austin-based networking app for the beauty industry. They saw men get funded for similar ideas despite having less evidence that they could be successful, they said.

“Men are really allowed to be visionaries and women are not,” Nikki told Business Insider. “Women have to have proof points, and even those proof points aren’t good enough most of the time.”

The sisters told Business Insider that they found it frustrating to watch their male counterparts rake in larger amounts of funding based solely on their ideas while they had to build credibility by raising much smaller amounts, bit by bit. They also worried that publicly discussing what they were going through would be taken as a sign of weakness.

“You can very quickly be looked at as ‘Oh, you’re just pulling a female card, or a brown-founder card because you haven’t been successful fundraising,’ when that’s not the case,” …read more

Source:: Business Insider


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