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CHAPTER 7 Managing Entrepreneurial Ventures 225 #2 CASE APPLICATION The X Factor Topic: Women entrepreneurs, EV funding In today's business climate, entrepreneurial activity is strong. The women founders, however, were questioned about how It's a great time to be an entrepreneur. More than ever, the they would avoid failure. And it's not just male venture I people seizing entrepreneurial opportunities are women.42 capitalists asking those kinds of questions. Female investors But while it may be a great time to be an entrepreneur, do men were just as likely as their male counterparts to focus their and women face the same challenges and an equal playing questions to female entrepreneurs on preventing failure. The field? Granted, there are a number of accomplished and noted result ... less money offered to the female founders. In fact, female entrepreneurs, currently and historically. Here are just a for every additional "avoiding failure" question asked of an few you might have heard of: Weili Dai, co-founder of Marvell entrepreneur, the startup received, on average, $3.8 million Technology Group, a company that makes semiconductors; less. A shocking amount, and an amount that could mean Leslie Blodgett, founder of several beauty brands, includ success or failure.45 ing Bare Escentuals and Shiseido; Angie Hicks, creator of So what's the solution? Well, as we said earlier, hav- Angie's List, a website that helps connect consumers with lo ing more women venture capitalists does not appear to be cal service providers; Sara Blakely, creator of the SPANX line working. But female entrepreneurs should prepare them- of shapewear; Debbi Fields, the selves to recognize questions that female entrepreneur known for the Overcoming the are about preventing failure and popular nationwide brand, Mrs. reframe their responses to ben- Fields Cookies: Rashmi Sinha, CHALLENGES efit their startups. And, VCs them- creator of the online presentation selves should pose a balance of tool SlideShare. But female entrepreneurs do face challenges promoting success and preventing failure questions to male that their male counterparts may not, especially when it comes and female founders alike. to getting funding from venture capitalists. One of the findings of the GEM study-the global en- Discussion Questions trepreneurship study we talked about earlier in the chapter- is the gender gap in confidence about the ability to start a 7-19 According to the research cited in this case story, what chal- company. Around 48 percent of men expressed concern, lenges do female entrepreneurs face? but some 62 percent of women expressed concern about 7-20 Funding is an important decision for entrepreneurs. How are their ability to start a company.43 The biggest disadvantage women affected during the venture capital funding process? for women, however, comes from the pursuit of venture Why is this a problem for female entrepreneurs? capital funding. Women get a tiny fraction of venture capital 7-21 If you were a venture capitalist (male or female), what steps would you take to avoid asking biased questions that disadvan- funds compared to men. Women have founded nearly 40 tage female entrepreneurs? percent of all privately held companies but have received only about 3 percent of all venture capital funds.44 And 7-22 Can you think of any other possible solutions to prevent this type of bias from taking place? Be creative as you think about new research points to a surprising reason. Male and fe- this. male entrepreneurs get asked different questions by venture 7-23 Pretend that you're a venture capitalist. Write three questions capitalists (VCs), and it affects how much funding they that you I want to ask an entrepreneur seeking funding. get. The researchers found that male founders are typically Pair off with another class member and evaluate each other's asked questions about how their companies will succeed. questions to see if there is any possible bias