Working Paper: NBER ID: w26449
Authors: Sabrina T. Howell; Ramana Nanda
Abstract: Exploiting random variation in the number of venture capitalist (VC) judges assigned to panels at Harvard Business School’s New Venture Competition (NVC) between 2000 and 2015, we find that exposure to more VC judges increases male participants’ chances of founding a VC-backed startup after HBS much more than this exposure increases female participants’ chances. A survey suggests this is in part because male participants more often proactively reach out to VC judges after the NVC. Our results suggest that networking frictions are an important reason men benefit more than women from exposure to VCs. Such frictions can help explain part of the gender gap in entrepreneurship, and also have implications for how to design networking opportunities to facilitate financing of the best (rather than just the best networked) ideas.
Keywords: venture capital; gender gap; entrepreneurship; networking frictions
JEL Codes: D83; D85; G24; J16; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Exposure to more venture capitalists (VCs) (G24) | likelihood of male participants founding VC-backed startups after Harvard Business School (HBS) (M13) |
| Exposure to more venture capitalists (VCs) (G24) | likelihood of female participants founding VC-backed startups after Harvard Business School (HBS) (M13) |
| Networking frictions (D85) | gender gap in entrepreneurship (L26) |
| Male participants proactively reaching out to VCs (G24) | likelihood of founding VC-backed startups (L26) |
| Female participants' reservations about leveraging connections (J16) | likelihood of founding VC-backed startups (L26) |