Promotive vs. Preventive: How female founders answer questions from investors

Investors tend to ask men (promotion) questions about the potential for gains, and they tended to ask women (prevention) questions about the potential for losses. This bias contributes to a situation in which women-led start-ups receive less money from investors. In this communication, however, it is not only the questions that are crucial, but also the answers: If entrepreneurs reframe their responses to prevention questions, they may be able to raise more funds.

To gain a better understanding of the entrepreneurial landscape in Switzerland, Alejandro Duran and Angad Manik conducted a survey on behalf of the FE+MALE Think Tank specifically targeting female founders. The single-choice questionnaire subtly incorporated promotional and preventive responses, allowing to uncover any underlying biases in their answers and determine their inclinations toward risk aversion or growth.

64% promotional responses

The initial findings painted a hopeful picture. The respondents demonstrated an average of about 64% promotional responses. Notably, there was a clear inclination towards optimistic thinking in specific areas such as monetization plans and five-year forecasts. However, the survey also highlighted areas of concern. When discussing significant milestones, only one in four respondents maintained a growth-oriented mindset, focusing on scaling their business. The majority shifted towards a problem-solving narrative, prioritizing caution over envisioning high returns. They selected the answer which mentioned fixing developmental issues and problems concerning the product as milestones instead of an answer which focuses on growth.

Further Analysis indicates a fluctuating trend in founders’ mindset as they move through various stages of the startup journey. The proportion of preventive responses is highest in the pre-seed and seed phase, then drops sharply and rises again in the growth phase without reaching the level of the seed phase.

The FE+MALE Think Tank does not limit itself to analysis. It recognizes Gender Diversity as more than just an equity issue—as a powerful catalyst for innovation. Data consistently show that startups with gender-diverse founding teams deliver superior returns and outshine their peers. Yet, an alarming 7.2% of venture capital funding reaches female founders—a clear imbalance fueled by unconscious bias in investor questioning.

To confront this glaring challenge, the FE+MALE Think Tank, supported by the Gebert Rüf Stiftung, launched the Beat Funding Bias Initiative (BFBI). BFBI is aimed at:

• Encouraging investors to cultivate an unbiased approach in their questioning, ensuring equitable assessment of all entrepreneurs.
• Equipping female entrepreneurs with the vital tools and skills to strategically navigate the investment process strategically, thus increasing their likelihood of securing much-needed capital.

More information on the Beat Funding Bias Initiative and how you can support the initiative on the FE+MALE website.

A more comprehensive paper with the results of the first analysis can be downloaded below.

(Stefan Kyora)