IDEAS home Printed from https://ideas.repec.org/a/sae/jouent/v30y2021i1p134-152.html
   My bibliography  Save this article

Gender Diversity Effects in Investment Decisions

Author

Listed:
  • Lennard Hohl
  • Peter M. Bican
  • Carsten C. Guderian
  • Frederik J. Riar

Abstract

This study examines the gender gap in investment decisions in a prominent setting: the American TV show Shark Tank . Our study is based on a sample of 895 pitches from 10 seasons comprising 222 episodes from 2009 to 2019. Contradicting prior research, our findings suggest that female entrepreneurs are not discriminated against in pitch success rates, independent of their respective industrial settings. We find that the valuations from the entrepreneurs themselves (males overvalued their ventures by 57.19%) and final deal valuations (male deals were overvalued by 50.50%) are significantly lower for females, hinting towards a self-imposed gender gap in entrepreneurship and angel investing. As the gender gap in entrepreneurship and angel investment seems to result from a lower rate of entrepreneurial intentions by women, we suggest fostering female entrepreneurship by raising the number of female entrepreneurs and business angels who may serve as role models among those potential female entrepreneurs and business angels at the brink of becoming actual entrepreneurs, as demonstrated in Shark Tank . Particularly, in teams, mixed founder teams consisting of males and females may support the creation of promising start-ups with viable business models.

Suggested Citation

  • Lennard Hohl & Peter M. Bican & Carsten C. Guderian & Frederik J. Riar, 2021. "Gender Diversity Effects in Investment Decisions," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 30(1), pages 134-152, March.
    • Handle: RePEc:sae:jouent:v:30:y:2021:i:1:p:134-152
    DOI: 10.1177/0971355720974821
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0971355720974821
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0971355720974821?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    2. Candida G. Brush & Nancy M. Carter & Patricia G. Greene & Myra M. Hart & Elizabeth Gatewood, 2002. "The role of social capital and gender in linking financial suppliers and entrepreneurial firms: A framework for future research," Venture Capital, Taylor & Francis Journals, vol. 4(4), pages 305-323, October.
    3. Roundy, Philip T. & Bradshaw, Mike & Brockman, Beverly K., 2018. "The emergence of entrepreneurial ecosystems: A complex adaptive systems approach," Journal of Business Research, Elsevier, vol. 86(C), pages 1-10.
    4. Block, Joern & Fisch, Christian & Vismara, Silvio & Andres, René, 2019. "Private equity investment criteria: An experimental conjoint analysis of venture capital, business angels, and family offices," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 329-352.
    5. Martijn Adriaan Boermans & Daan Willebrands, 2017. "Entrepreneurship, risk perception and firm performance," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 31(4), pages 557-569.
    6. Jeffrey M. Pollack & Matthew W. Rutherford & Brian G. Nagy, 2012. "Preparedness and Cognitive Legitimacy as Antecedents of New Venture Funding in Televised Business Pitches," Entrepreneurship Theory and Practice, , vol. 36(5), pages 915-939, September.
    7. Thomas Hellmann & Manju Puri, 2002. "Venture Capital and the Professionalization of Start‐Up Firms: Empirical Evidence," Journal of Finance, American Finance Association, vol. 57(1), pages 169-197, February.
    8. Spyros Arvanitis & Tobias Stucki, 2014. "The impact of venture capital on the persistence of innovation activities of start-ups," Small Business Economics, Springer, vol. 42(4), pages 849-870, April.
    9. Gabriela Calderon & Leonardo Iacovone & Laura Juarez, 2017. "Opportunity versus Necessity: Understanding the Heterogeneity of Female Micro-Entrepreneurs," The World Bank Economic Review, World Bank, vol. 30(Supplemen), pages 86-96.
    10. Kim Hoe Looi, 2020. "Contextual Motivations for Undergraduates’ Entrepreneurial Intentions in Emerging Asian Economies," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(1), pages 53-87, March.
    11. Guzman, Jorge & Kacperczyk, Aleksandra (Olenka), 2019. "Gender gap in entrepreneurship," Research Policy, Elsevier, vol. 48(7), pages 1666-1680.
    12. Juhi Raghuvanshi & Rajat Agrawal & P. K. Ghosh, 2017. "Analysis of Barriers to Women Entrepreneurship: The DEMATEL Approach," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 26(2), pages 220-238, September.
    13. Raymond K. Van Ness & Charles F. Seifert & Janet H. Marler & William J. Wales & Mark E. Hughes, 2020. "Proactive Entrepreneurs: Who Are They and How Are They Different?," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(1), pages 148-175, March.
    14. Colin M. Mason & Richard T. Harrison, 2008. "Measuring business angel investment activity in the United Kingdom: a review of potential data sources," Venture Capital, Taylor & Francis Journals, vol. 10(4), pages 309-330, July.
    15. Richard T. Harrison & Colin M. Mason, 2007. "Does Gender Matter? Women Business Angels and the Supply of Entrepreneurial Finance," Entrepreneurship Theory and Practice, , vol. 31(3), pages 445-472, May.
    16. Frances M Amatucci & Jeffrey E Sohl, 2004. "Women entrepreneurs securing business angel financing: tales from the field," Venture Capital, Taylor & Francis Journals, vol. 6(2-3), pages 181-196, April.
    17. Bellucci, Andrea & Borisov, Alexander & Zazzaro, Alberto, 2010. "Does gender matter in bank-firm relationships? Evidence from small business lending," Journal of Banking & Finance, Elsevier, vol. 34(12), pages 2968-2984, December.
    18. Eddleston, Kimberly A. & Powell, Gary N., 2008. "The role of gender identity in explaining sex differences in business owners' career satisfier preferences," Journal of Business Venturing, Elsevier, vol. 23(2), pages 244-256, March.
    19. Leonora Risse & Lisa Farrell & Tim R L Fry, 2018. "Personality and pay: do gender gaps in confidence explain gender gaps in wages?," Oxford Economic Papers, Oxford University Press, vol. 70(4), pages 919-949.
    20. Lakshmi Balachandra & Tony Briggs & Kim Eddleston & Candida Brush, 2019. "Don’t Pitch Like a Girl!: How Gender Stereotypes Influence Investor Decisions," Entrepreneurship Theory and Practice, , vol. 43(1), pages 116-137, January.
    21. Markussen, Simen & Røed, Knut, 2017. "The gender gap in entrepreneurship – The role of peer effects," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 356-373.
    22. Florian Follert & Jeffrey M. Herbener & Michael Olbrich & David J. Rapp, 2018. "Agree or disagree? On the role of negotiations for the valuation of business enterprises," Post-Print hal-02320355, HAL.
    23. Claire Leitch & Friederike Welter & Colette Henry, 2018. "Women entrepreneurs’ financing revisited: taking stock and looking forward," Venture Capital, Taylor & Francis Journals, vol. 20(2), pages 103-114, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Julia Keidel & Peter M. Bican & Frederik J. Riar, 2021. "Influential Factors of Network Changes: Dynamic Network Ties and Sustainable Startup Embeddedness," Sustainability, MDPI, vol. 13(11), pages 1-20, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John R. Becker–Blease & Jeffrey E. Sohl, 2011. "The Effect of Gender Diversity on Angel Group Investment," Entrepreneurship Theory and Practice, , vol. 35(4), pages 709-733, July.
    2. Bradley, Samantha R. & Gicheva, Dora & Hassell, Lydia & Link, Albert N., 2013. "Gender Differences in Access to Private Investment Funding to Support the Development of New Technologies," UNCG Economics Working Papers 13-9, University of North Carolina at Greensboro, Department of Economics.
    3. Douglas Cumming & Satish Kumar & Weng Marc Lim & Nitesh Pandey, 2023. "Mapping the venture capital and private equity research: a bibliometric review and future research agenda," Small Business Economics, Springer, vol. 61(1), pages 173-221, June.
    4. Sun, Xiaoyan & Xie, Xuanli, 2024. "How does digital finance promote entrepreneurship? The roles of traditional financial institutions and BigTech firms," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    5. Barbara Orser & Susan Coleman & Yanhong Li, 2020. "Progress or pinkwashing: who benefits from digital women-focused capital funds?," Small Business Economics, Springer, vol. 55(2), pages 363-387, August.
    6. Sharon Poczter & Melanie Shapsis, 2018. "Gender disparity in angel financing," Small Business Economics, Springer, vol. 51(1), pages 31-55, June.
    7. Jetter, Michael & Stockley, Kieran, 2021. "Gender Match and the Gender Gap in Venture Capital Financing: Evidence from Shark Tank," IZA Discussion Papers 14069, Institute of Labor Economics (IZA).
    8. Stjepan Srhoj & Bruno Škrinjarić & Sonja Radas & Janette Walde, 2022. "Small matching grants for women entrepreneurs: lessons from the past recession," Small Business Economics, Springer, vol. 59(1), pages 117-142, June.
    9. Andrea Bellucci & Gianluca Gucciardi & Rossella Locatelli & Cristiana Schena, 2022. "Gender Gap in Business Angel financing," Mo.Fi.R. Working Papers 175, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    10. Michael Jetter & Kieran Stockley, 2023. "Gender match and negotiation: evidence from angel investment on Shark Tank," Empirical Economics, Springer, vol. 64(4), pages 1947-1977, April.
    11. Sara Poggesi & Michela Mari & Luisa Vita, 2016. "What’s new in female entrepreneurship research? Answers from the literature," International Entrepreneurship and Management Journal, Springer, vol. 12(3), pages 735-764, September.
    12. Roccapriore, Ashley Y. & Imhof, Zoë & Cardon, Melissa S., 2021. "Badge of honor or tolerable reality? How previous firm failure and experience influences investor perceptions," Journal of Business Venturing Insights, Elsevier, vol. 16(C).
    13. Monika Wodnicka & Dagmara Skurpel, 2021. "Growth Global Market of E-Commerce Cross Border: The Case of Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 1121-1135.
    14. Johannes Wallmeroth & Peter Wirtz & Alexander Peter Groh, 2017. "Institutional Seed Financing, Angel Financing, and Crowdfunding of Entrepreneurial Ventures: A Literature Review," Working Papers hal-01527999, HAL.
    15. Ferdinando Giglio, 2021. "Women Entrepreneurs and Business Angel: A Difficult Relationship," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(11), pages 1-21, November.
    16. Sun, Xiaoyan & Ding, Waverly & Xie, Xuanli, 2024. "The Internet and the gender gap in entrepreneurship: Evidence from China," Journal of Business Venturing, Elsevier, vol. 39(5).
    17. J. Michelle Brock & Ralph De Haas, 2023. "Discriminatory Lending: Evidence from Bankers in the Lab," American Economic Journal: Applied Economics, American Economic Association, vol. 15(2), pages 31-68, April.
    18. Volodymyr Babich & Simone Marinesi & Gerry Tsoukalas, 2021. "Does Crowdfunding Benefit Entrepreneurs and Venture Capital Investors?," Manufacturing & Service Operations Management, INFORMS, vol. 23(2), pages 508-524, March.
    19. Valérie Revest & Alessandro Sapio, 2012. "Financing technology-based small firms in Europe: what do we know?," Small Business Economics, Springer, vol. 39(1), pages 179-205, July.
    20. Fabio Bertoni & María Ferrer & José Martí, 2013. "The different roles played by venture capital and private equity investors on the investment activity of their portfolio firms," Small Business Economics, Springer, vol. 40(3), pages 607-633, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jouent:v:30:y:2021:i:1:p:134-152. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.ediindia.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.