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Networking Frictions in Venture Capital, and the Gender Gap in Entrepreneurship

Published online by Cambridge University Press:  23 June 2023

Sabrina T. Howell  and
Ramana Nanda
Sabrina T. Howell
Affiliation:
NYU Stern, Department of Finance sabrina.howell@nyu.edu
Ramana Nanda*
Affiliation:
Imperial College London, Department of Finance
*
ramana.nanda@imperial.ac.uk (corresponding author)
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Abstract

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We find that male participants in Harvard Business School’s New Venture Competition who were randomly exposed to more venture capital (VC) investors on their panel were substantially more likely to start a VC-backed startup post-graduation, indicating that access to investors impacts fundraising independent of the quality of ideas. However, female participants experience no benefit from exposure to male or female venture capitalists (VCs), which appears related to a reduced propensity to reach out to VCs to whom they were exposed. Our results therefore also demonstrate gender-based differences in the degree to which increased exposure to investors can address networking frictions in venture capital.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 59 , Issue 6 , September 2024 , pp. 2733 - 2761
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

Footnotes

We thank Louis Maiden for exceptional research assistance. We are grateful to Jodi Gernon for her feedback and support, and to Catherine Cronin, Nick Janini, Julia Kemp, Samantha Snyder, and Coral Sullivan for their help with providing us data. We also thank an anonymous referee, Tom Eisenmann, Michael Ewens, Mara Faccio (the editor), Will Gornall, Rem Koning, Kathryn Shaw, Rick Townsend, and the participants at the Kauffman Foundation Entrepreneurship Scholars Conference and the 2020 American Finance Association for helpful comments. Howell thanks the Kauffman Foundation, especially Sameeksha Desai, for generous support. Nanda acknowledges support from Imperial College London and the Division of Research and Faculty Development at Harvard Business School.

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