Office Hours: I'm a Leadership/Entrepreneurship professor at Harvard Business School. I research implicit bias in fundraising.
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Office Hours: I'm a Leadership/Entrepreneurship professor at Harvard Business School. I research implicit bias in fundraising.Featured
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Hi Everyone! Iโm an Associate Professor of Leadership and Entrepreneurship at Harvard Business School and Iโm the author of Edge: Turning Adversity into Advantage, a book on how to make your own privilege and overcome the barriers others create, while staying true to yourself. My research looks at early-stage entrepreneurship and the role of interpersonal relationships and implicit factors in investment decisions of angel investors and VCs. My work studies the subtle signals and cues that often impact the behavioral perceptions of investors, which can lead to implicit bias in the investing process.My work has been published in several journals including the Academy of Management Journal, Administrative Science Quarterly, and the Proceedings of the National Academy of Sciences. I have also been featured in the Financial Times, The Wall Street Journal, USA Today, Forbes, and Nature. I have won a number of awards for my research, and I was named one of the 40 Best Business School Professors Under the Age of 40 by Poets & Quants. Before coming to Harvard, I was an assistant professor of Management at the Wharton School at University of Pennsylvania.Ask me anything about the interpersonal mistakes founders make while pitching to investors, the ways implicit bias impacts fundraising, or anything else!
cadran·Apr 27, 2020cadran·Apr 27, 2020thanks so much for joining us @laurahuang !hi Elphas โ please ask @laurahuang your questions by this Thursday. She may not have time to answer them all, so please emoji upvote the ones you'd most like her to reply to.
Hi Laurahuang, thank you for all that you do and your focus on bias disparities. I want to be candid about my question therefore I want a straightforward answer no matter how insensitive it may sound(I'd appreciate it). I have a startup and I normally don't show my identity for the reasons you've spoken of. Although women are least supported in the tech world it's is even more disapprotionate for black women. I've had people genuinely interested in my project without knowing I'm a woman and black just to have their attitude completely change when they find out, especially white men. Should I find a white man to be the face of my company in order for me to go forward? What are the stigmas against black women?As I write this I'm just noticing how emotionally debilitating this can be when you work so hard. I just want a fair chance. Sincerely a shattered ๐ Thank you for your feedback
First of all, I love how you asked for a straightforward answer and don't want any sugar-coating. There are definitely going to be different dynamics based on who you are, what you look like, what your background is, and so on. Change any of these variables, even just slightly, and you'll be perceived in a completely different way. That's the power of intersectionality. A white woman is going to be perceived differently than a black woman than a black man than a white man. Here's the blunt part of my answer: yes, *on average*, that white man is going to have an "easier" time. Does that mean you should find a white man? Only if that person is going to provide real value, beyond just helping with stigma. He should be helping to make your life easier on multiple dimensions... product, service, tech, whatever. Because as some of the others alluded to, that's what you'll need in the long-term. No value in bringing someone on just for the short-term where the value is not sustained.But here's the last part of my answer: how can you shift things in *your* favor? How can you take the obstacles, the adversity, the disparities, and flip them around to create your own advantages? That's what I've been examining in a lot of my recent research. Send me a note and happy to chat with you more about this specifically.
@kitagivens Iโm no expert, but I can share with you my personal experience. I tried hiring a male front, but eventually the investors found out that a female founder is running the show and they didnโt like that. If you have a big chunk of equity, even with a male Co-founder, one way or another you will end up facing prejudice!I would target European grants/ Investors if I were you. From my experience, most of the time, itโs strictly Business there. i moved my company to Europe because I honestly canโt waste my time nor my energy on dealing with this whole male supremacy crap!Happy to connect for support anytime โ๐ปโจ
Thank you, this is very helpful feedback. I will look into the business infrastructure of Europe. Is there a particular country you feel is more worthy than others to seek the best opportunity?
Check out grants in the UK and in Berlin 100000%! Most famous grants are The Smart Grant and Horizon 2020. In Berlin take a look at Berlin Partner! ๐๐ปโจ
I agree with Sabine that hiring a hoodie (as I like to call it) won't work in the long run, and you'll end up not just losing immediate investment opportunities, but also credibility with those investors who genuinely support you.
Great question that reflects so many people's reality. Hiding away from who you are will not pay dividends in the long run. Your business will thrive when you are free to show up as your whole and true self - not hide behind someone else. The stigma and discrimination is real but it can be confronted. It means you have to have a really strong story for the value that you will bring and to be able to justify your credibility. This is important anyway but even more so when you are a minority. Investors don't want to miss out and forward looking investors are looking to diversify the talent they are investing in. This can become part of your story that uses who you are as strength not weakness. If you are not right for them, they are not right for you. Best of luck.
Any advice for founders over 50 when approaching younger angels and VCs.
I would like to expand on this in particular to men. As men see us as "moms" and not business leaders.
Yes! In some of my research, I find that though the lay assumption of "older" founders is things like: not as technically proficient, not as creative, etc., there's actually only one underlying assumption that drives all of these perceptions. And it's curiously. I talk about this research in some of my talks and keynotes. If you go to laurahuang.net, you can find some of those talks. Feel free to reach out if I can be even more helpful on this topic.
Thank you, Laura.In lieu of the current climate, do you anticipate any new or emerging fundraising ecosystems?
I do think there will be some new things to come out of this. Right now there are some that are still in "crisis" mode--and they are still trying to weather this storm and figure out how to operate. Others have moved into "opportunity" mode. I don't necessarily like the word opportunity in this context, because it suggests some sort of personal (unfair) gain, but I do think that funders and investors are trying to figure out where there are inefficiencies and looking to new and emerging options.
To what extent can a start up succeed without funding? Would you encourage non white men to go the boot strapping way, or fight the patriarchy and try to pursue funding?
I'm a huge proponent of bootstrapping and going as long as humanly possible without external funding (that is, if you are in a position to do so financially and personally). You just have the opportunity to get more traction, more proof points, and retain much more power in the entire process. Plus, you allow for the possibility that you will never need outside financing, which saves you so much time and heartache, because the more opinions there are, the more complexity. The caveat is advice and other intangibles... so you do need to consider how much of that you'll need.
This is super helpful, I didn't think about the benefits of bootstrapping because I thought about the kudos associated with being backed by money, but in fact it doesn't matter so much.
Thanks Laura, We have all read the studies about VCs asking women preventive questions and men promotional questions. There is inherent bias in how assertive vs. more reserved you are, what you wear matters as a woman, that people gravitate and do business with those that look like them, the fact that women founders without a male co-founder may struggle more or two women even more so. What are some biases we don't hear as much about or would be surprised to learn. Women tend to do better raising in later rounds relatively than men. Do you think early-stage investors are just not willing to bet on women?Thanks!
Those studies about VCs asking women prevention-focused questions... I'm not sure if you were trying to indirectly compliment me, or if that was purposeful, since those were my published studies that you're referring to and you were actually citing my work :) But yes, there are additional biases other than the ones that you're mentioning. For example, in my most recent work, I talk about this love affair that investors have with growth and scalability and long-term (size) potential. How do investors decide how big and scalable something is? They're swayed by how concretely or abstractly something is described, and women have a tendency to speak more concretely. This is even more so because they're trying to give lots of details, and facts, and assert their credibility. If you want to dig in deeper, you can read more on this here: https://journals.aom.org/doi/abs/10.5465/amj.2018.1417
I actually put two and two together after I sent it and thought about your name again!! Sorry about that delayed reaction. Great research!!!
Thanks Laura for taking the time to share your insights with us! One question I have is that - With being assertive in the middle, on one end of the spectrum, there is "too friendly" and on the other is "rude/b*tchy". If we are friendly, then we have instances where an investor finally decides to invest but sends the female founder a lewd text later that night. Or If we are too assertive, then the investor community forms a general consensus of that founder being a b*tch and makes it incredibly hard to fundraise. What can women do to be seen as assertive hustlers working really hard to build a business?!
Be kind, but firm. If you're kind (this is different from feeling the need to be friendly), then you'll be true to your values. If you're firm, you'll be true to the value you know you provide. If you're kind, but firm, then those who like you will like you for the right reasons, and those who don't, you can throw into the "not everyone will like me" category.
Thanks Laura. Very solid advice. I will admit though - it is easier said than done, but I will persevere. In fact, I am going to frame it as a constant reminder for myself so that I can push through that dejection and noise.
Hi Laura! I've found it strange that while tech companies release diversity stats on their workforce, VC don't release any information on the founders they invest in. If a metric isn't even measured, it's unlikely it will improve. Is there any work being done in analyzing the demographics of portfolio founders for different VCs? I feel like this would be really important in understanding what factors go into helping direct more investment to women and minorities (e.g. whether the demographics of the investors themselves matter) and it seems like important data for informing founders and LPs.
Totally agree, and it's one of the things that I'm currently trying to do! Just takes a ton of time and effort and (wo)manpower!
Make sense! I've wondered if Crunchbase would provide some rough stats since they have female founders lists and records for who invested in what. I'm really happy to hear your working on the problem! There seems to be very little focus on actually finding and investing in female founders, and more on hiring female partners and hosting diversity events. I suspect its because VCs fix what is visible, and right now portfolio diversity stats aren't.
Thanks, Laura, for sharing with the community! I had the pleasure of attending one of your talks and really appreciated your nuanced response in thinking about the intersectionality of race and gender, and also the ways in which we can play others' biases about us in our favor. However, it is also increasingly clear that a lot of the people most versed in the literature are women, and that men are totally oblivious to the implicit bias in fundraising and, when told about it, often react with defensiveness or denial.What are actionable strategies for getting more men and more allies involved in this and to actually lead the charge to change the status quo? Your studies have also shown that their voices resonate more among those who are the worst perpetrators of implicit bias, as opposed to the voices of women asking for equal treatment.
Thanks Joyce! Flattery is always a great way to start a question/comment :) You're totally right. People are going to care about things most when it is personally resonant and salient to them. (Some) men just don't care because it's not something that is on their radar and others because it hasn't really affected them personally in a way that matters. So how do we make it personally relevant? It's about Advocacy vs. Inquiry. Something that I discuss with my students and in my research all the time is that we need to know when to have an "advocacy" mindset, when to have an "inquiry" mindset, and when to toggle between the two. Advocacy is about: "you must listen to me because I have something important to say." Inquiry is about: "help me understand where you're coming from." We need a combination of both to make it real and resonant and important to those who don't naturally see a problem.Now should we have to do all of this, to convince others that bias and inequality are important considerations? That's an entirely different conversation...
Thank you Laura for your time. I wonder if you know of databases or studies from around the world that collect ethnicity or socio-economic status of the founders. I work in Sweden and here the government has not collected information based on ethnicity, so it is currently hard for policymakers to understand the challenges. Please also share with us online talks or podcasts about your study or yourself. Thank you for dedicating time to this problem.
I think we're seeing improvement, and personally, I've been collecting data on ethnicity, race, SES, etc. for a while, but the problem is how to get large enough sample sizes to say something in a way that is also statistically rigorous and significant. What I mean by this is that a lot of the findings that I've shown based on women also hold based on race, ethnicity, and so on. But that work isn't published because I don't have large enough sample sizes to get the same level of statistical significance. I've been able to do it more in some of my health care samples - you can find more on my website (laurahuang.net) and feel free to reach out if I can share more!
What resources are out there for women who are fundraising for their startup? Specifically, what networks, forums, events, etc. can women use to find women in the VC world who can help fund their company, or men who are actively looking to support women-led startups?
There are lots of resources out there, but what is going to be most valuable is considering two things: Scope and (Inter)connectedness. What you want is to tap into networks, forums, and events that first off have the same scope of coverage as what you're looking for. Second, you want to look for how interconnected people are within that network. Put simply, find the right resources for what you're looking for. Are you looking for advice, mentoring, introduction, funding, emotional support? That's going to dictate which places are going to be worth your time. Otherwise, you're going to be overwhelmed by all that is out there... But to leave you with at least something... here's a bunch that come to mind: Rent the Runway foundation, 37 angels, Women 2.0, Cartier's Women Initiative, the Alliance of Women Entrepreneurs, Female Founders Fund, All Raise, SoGal Ventures, Tory Burch Foundation, Womenโs Business Center, Womenโs Venture Fund, Women Who Startup. See... already overwhelmed. So find your pocket of need, and find your people! :)
Thanks for the AMA :) I know an investor that practices the rooney rule but for pitches. Do you think setting such hard rules is important and helpful?
Depends on how they use these rules. The NFL seems to think it works, but I think it's up to us to take these rules and use them to our advantage. If they're interviewing us because of some loophole, then find a way to jump through that loophole, and then make it authentically ours. Some people naturally have an advantage, and others have to make their own. In my research and in my book, I talk more about how to make this work in authentic, *viable* ways.
Hello Laura @laurahuang,I am Co-Chair of Women in Bio - Entrepreneur Center (currently 30+founders in different funding stages associated with us). We support women founders of innovative life science projects with resources, webinars and this year as well with facilitating access to capital in collaboration with Life Science Nation and RESI. Your research is super interesting to us. Christina Takke, partner at V-Bio Ventures in Europe published a desk research study her team conducted end of 2019 on potential bias of institutional investors towards female led teams or women co-founded companies. We had Kim Kamdar, partner at Domain Associates also visit and speak about potential bias and how we can support women founders and first time CEOs with specific programs.Please reach out to me directly if you would be interested in connecting with us and would be open to a speaking engagement via webinar. Here is the website of women in Bio www.womeninbio.orgSince our Boston chapter is very strong, I am sure they have reached out before. The Entrepreneur Center is a relative new national initiative.I am looking forward to your thoughts and response.With appreciationSibylleSibylle HauserCo-Chair, WIB-Entrepreneur CenterChair, WIB Founders Forum[email protected]P.S. any "elpha" female founder in the life sciences is welcome to reach out to me to learn more about our peer to peer group, the founders forum. Cross Mentoring is very powerful. We have several serial women founders with great funding success participating as well. Focus is on life science projects (therapeutics, diagnostics, digital health).
Thanks so much for your office hours Laura! I'm wondering about how attractive a successful second-time founder (usually male) is for investors and if there's a cycle of getting-better-termsheets-because-of-track-record that perpetuates a gender disparity in fundraising.
These two variables are intersectional... second-time founders are seen in a more positive light than first-time founders (some caveats based on what their first startup was, how it did, etc.), but male founders (regardless of serial entrepreneur or not) tend to get more funding and have more preferential terms than female founders (even if they are second-time founders). There are lots of nuances to this though, and these are just general trends that I'm talking about here that I've observed in some of my data.
What are 3 concrete and practical tips you would offer when fundraising?
1. Know what you offer2. Know what your product/service offers3. Know who you're pitching to.And... make sure you have super tight message about how and why all three fit together crisply and cleanly.
Hi Laura! Thank you so much for being here and for your important work in increasing gender equity in entrepreneurship. I'm also curious about your journey to becoming a professor-- do you mind sharing your story of how you got hired and found your initial entry into academia?
Haha, it wasn't a pretty one. I'm pretty bruised and battered by this point. I share the entire story in my book, but the short version is that I was rejected from Harvard 3 times (MBA, PhD, new faculty), before becoming a professor at HBS studying rejection, failure, and inequality. I had to learn how to flip circumstances in my favor...
Hi Laura, I hope you are well & thank you for being open to questions!! I wanted to get your thoughts on the other side of the table -- what more can the VC community do (outside of training and diversity events) to realize their own implicit biases and best support founders on all fronts of the diversity spectrum to address the gaps during the fundraising process?
Hi Laura - Also, have you studied bias in the ability of 'male' founders to be better at executing than female founders? There are two interesting cases at least (I am hoping to be a third!), where VCs have founded more experienced founders but failed pretty badly long term. - Gobble founder Ooshma Garb seems to be copied by Blue Apron (but more sustainable then them)- Juliette founder @RechelleBalanzat seems to be copied by Rinse and several others. How can we get press for these women who have done a stellar job but not 'as' funded as their male counterparts? It seems there are some things only the right founder can execute on.
I haven't looked directly at ability to execute, but this would be fascinating. The problem is that there are so many potential confounds. In terms of research methods, there isn't a clean way to compare apples with apples to measure equivalent startups and then accurately isolate 'execution'. There are too many other explanatory variables that could be driving the effect, and hence this type of phenomenon is hard to study.
Super interested in this! I discovered in the process of researching and producing my podcast and came across the co-founders of iFundwomen and SoGal Ventures and seeing the gap of women-owned business and the money.Questions:1. Do you think that inherent bias is because of the gender of the founders or is it because of the businesses that they choose to start? -- Have read in a book (forgot which) about how the generic is always masculine and how the niche is always feminine. Likewise, women start businesses in very niche gaps because of a myriad of reasons and that's really leading to my second question...2. Do you think VC funding as a structure is inherently not good for women-owned businesses? -- Am thinking that the high investment and high returns means businesses need a more wide net in terms of audience. Women-owned businesses tend to focus on smaller niches, therefore not as lucrative from a VC perspective. And I think that's why iFundwomen really came about as an alternative to other models of funding.
Hi Laura!Thanks so much for sharing your time here! My life outside my start-up is as a PhD candidate, and I cited much of your work in my comprehensive exam last fall! How amazing that you're here as well!I'm researching how gender bias may be exacerbated by the language used to describe 'problems to be solved' (specifically in watertech), from a Terror Management Theory lens. Curious if you have any thoughts on how threatening language/mortality reminders can influence gender bias, within pitching or elsewhere. My research is no longer specifically on pitching (more on water and innovation in general) but I'm still very interested in this!Thanks for all your amazing research and for participating in this AMA!Lauren
Thank you for your work, Laura. Quick story to highlight the need it:I'm CEO and Co-Founder of a startup called Avo. Diversity is important to me. To eliminate unconscious bias in our hiring process we use beapplied.com, which is specifically built to do that.The three people who have ever questioned our decision to do this:White men around their forties, former founders turned investors... :)
Thanks for contributing to Elpha & it's beyond great someone is researching this. I'd like to share a gap I'm experiencing in funding for women. I'm a serial Entrepreneur who's raised $$$ and had a successful startup; however this time around (new startup) as a non-tech Founder, I'm stuck due to not finding a tech co-founder (I've tried a few/ hard to find in Houston). Usu a tech co-founder can code the MVP for sweat equity, de-necessitating the need for spark plug capital. Without one, women need smaller amounts of low-doc or spray and pray type capital to either outsource development of an MVP (not ideal) or better yet, need a 'spark plug capital + we'll code your MVP' type fund that provides the tech + the spark plug capital to defend the hypothesis/ beta test. So many more women founded businesses would get off the ground if this happens. Instead, everyone has the same narrative "we love your background and what you're doing; come back when you have more traction". Hopefully I won't need them if I have more traction. Women solve problems but as we know not as many women in tech, so less of us can code our own. Plus it's harder for us with Friends & Fam b/c those relationships are core to us. It's harder for us to lose them or more awkward to ask, anyone outside of parents. Thx again and I hope this helps! (I contacted about 50 pre-seed funds and those were the responses I got... I then contacted maybe 20 Accelerators and got the exact same responses.)
Hi @laurahuang I am currently taking the online HBS entrepreneurship class!I am in the process of building a social networking platform for sharing travel itineraries. I am pre-beta launch. Do you find females do better when approaching female angels/VCs for funding rather than men?
HI there - I've been researching ways to present data or scoring about founders, and their companies before pitching even. I'd love to chat about your work and see if there is any beneficial overlap.Do you think this would help? Or does it really just take more female success stories?
I am interested in how do you overcome the bias of not going to an ivy league school or having a MBA. People like to invest in women that have gone to an ivy or a top MBA school as someone else has already vetted this person and "deemed" they desire, smart and capable.
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