Cognitive Bias Driving the Skew Away from Women
David B Horne
Empowering Entrepreneurs to Achieve Exponential Growth | Entrepreneur | CFO | TEDx Speaker | Award-Winning Author.
Welcome to the Funding Focus newsletter where we share the latest in the fight for fairer funding in investment. This newsletter from Funding Focus founder, David B. Horne, is part of the platform that sheds light on the uneven playing field that female and under-represented entrepreneurs of all genders face when it comes to raising capital for their businesses. We hope you enjoy it!?
Read our latest edition below.?
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One question I get asked often is, “why do you think investors don’t invest in female founders?”.?
One answer is: Cognitive Bias.?
In my book, Funded Female Founders, I talk about Cognitive Bias and share my findings from interviews conducted with experts in the fields of human cognition, bias and gender differences in venture financing: Dr Itiel Dror and Dr Dana Kanze.?
“There is no question. The hard statistics and the first-hand stories both show that there is bias against female entrepreneurs. While I acknowledge some men are misogynists, I would like to think for most investors, the reason for this is rather less malicious: cognitive bias driving the skew away from women.”?
Dr Dror’s research found that there are eight sources of bias and that they are not mutually exclusive. Dr Kanze’s shows how this plays out in the types questions asked of female entrepreneurs, and the significant impact it has on the level of funding they secure and the valuation at which it is secured.?
Here is an excerpt from the book on Cognitive Bias"
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In most cases, bias is unintentional and occurs without the person displaying it even being aware of it. Blissful ignorance, one might say. This needs to change.
Read the full chapter in my book, Funded Female Founders: How to traverse the uneven playing field and secure funding to grow your business by grabbing a copy here. ?
What are your thoughts on Cognitive Bias and how it affects the field of fundraising and female entrepreneurs? Please share your thoughts in the comments.?
Until next time…
With love and gratitude,
David
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So it's not sexism, it's "cognitive bias"? Seems to me just a more academic palatable way to say "isms"! But hey, if being academic objective about it means the awareness of it within oneself, and breaking it down into the reasons for that bias leads to more understanding, then great. But it also seems to me to absolve responsibility by dissociation. But maybe that indeed is the key to change?
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2 年David B Horne, this is interesting! This is intriguing " cognitive bias driving the skew away from women." Cognitive bias is definitely worth digging into and doing the research, as it can change everything in your business and helps you make decisions relatively quickly. Looking forward to more insightful posts like this. Thank you for sharing your thoughts.
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2 年This is really thought provoking David. I imagine cognitive bias being difficult to change as you said yourself it is often "unintentional and occurs without the person displaying it even being aware of it."
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2 年Our biases are what make it possible to navigate the world every day. While they have a purpose, it is important to know we have them and then challenge our decisions by asking ourselves what biases resulted in our decision. Whether we are looking for funding or clients, it is key to be able to challenge the decision that others have made by asking insightful questions that will cause them to challenge their own biases. It may change the outcome in your favor. So first understanding what the biases are that we face and then how to ask the right questions to challenge those biases in a non-threatening way is key.
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2 年Cognitive and behavioral biases impact all decisions - thanks for sharing another example David B Horne.