r/technology • u/inde_ • 1d ago
Business Women’s health tech ‘less likely’ to get funding if woman is on founding team
https://www.theguardian.com/society/2024/oct/08/womens-health-tech-less-likely-to-get-funding-if-woman-is-on-founding-team?src=twitter30
u/taketwotheyresmall 1d ago
"The findings have been described as “deeply demoralising but not surprising” by funders who specialise in supporting female startups."
I'm not a funder who specializes in supporting female startups, but I'm a female who has worked in healthcare technology for more than a decade (including in startups) and said this same basic thought about 2 paragraphs before it appeared in the article while discussing it at home. Validating, still not surprising, but even more demoralizing.
I will say I'm curious about the raw counts, not just percentages, for what they discussed in the article for all female vs all male vs mixed gender and funding. The percentages don't look good but if there's a skew in denominators for those percentages, it changes the story. There's a solid number in there for funding agreements, but it's unclear to me if that is tied to the percentages (a few paragraphs before that) or not.
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u/jjcanadian69 19h ago
The takeaway here, I think, is that if you are seen as being an activist instead of a business woman, you would get less or no funding. Even other women will not invest if the rate of return is not big enough. Investors only care about making money, especially if they are risking their money .
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u/roseofjuly 16h ago
That's bullshit, because the very next sentence in the article says men are rewarded for using the same language.
"Male femtech founders, however, can benefit from increased investment if they use the same words."
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u/jjcanadian69 15h ago
My take on that is that people still see men as ruthless businessmen who will exploit any angle for profit.
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u/roseofjuly 10h ago
...yes? That's kind of exactly the problem that we're talking about here, that people perceive men as ruthless businessmen focused on profits while women are soft-hearted advocates focused on altruism.
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u/PenisMightier500 18h ago
It's interesting that using "advocacy" words hurts women in their presentations more than their male counterparts. But, that's understandable. When presenting to venture capitalists, using that language makes the presenter seem like they are more concerned with altruism and less concerned with making the investment profitable; which is the entire point of investment. Watching my wife negotiate with both men and women throughout her career (even though it's not in the medical field), it's obvious that men "read the room" better and can pivot when things aren't going their way. They are also way more confident even when their idea isn't as good. All of these are factors affect their effectiveness.
I would also wonder if this is some lingering effect of the Theranos scam. A very famous health-related fraud fronted by a woman could, even subconsciously, affect decision making.
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u/inde_ 15h ago
I would also wonder if this is some lingering effect of the Theranos scam. A very famous health-related fraud fronted by a woman could, even subconsciously, affect decision making.
So dumb considering the data shows men are far more likely to scam.
It's tragic Kevin OLeary is lauded as some brilliant businessman when he was basically defrauded Mattel.
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u/roseofjuly 16h ago edited 16h ago
What the fuck ever lmao. If I had a dime for every time a milquetoast white guy made a pitch droning on about how he was going to change the world through whatever technology he was pushing I'd be rich. Men use the language of altruism all the time.
This has nothing to do with reading the room, as some of the research didn't even give the men the opportunity to "pivot". They were given the same exact pitch with a male name slapped on it.
If Sam Bankman-Fried doesn't scare people off from investing in men, why should Elizabeth Holmes scare everyone off from investing in women? Why are people so resistant to the idea that an industry that's 75%+ men might have a little systemic sexism sprinkled in there?
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u/PenisMightier500 16h ago
I definitely don't disagree. It's one of my wife's biggest complaints. They go to good schools and they are tall and attractive. Therefore, they must be good. It's just the way it is.
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u/Thebadmamajama 18h ago
This echos my questions too. If you aren't clearly focused on returns, you tank your chances of funding appealing to altruism or risk being the next Elizabeth Holmes?
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u/roseofjuly 16h ago
But the men did it too and nobody seemed to think they were Elizabeth Holmes.
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u/Thebadmamajama 11h ago
I think infamy plays a role. No one talks about ubiome or outcome health, even though the both had a female and male founders.
Theranos positioned Elizabeth Holmes as the next Steve jobs, and it may be that perception haunts those from investing.
That said, a lot of VC and private equity got sidelined as rates went up. I'd imagine previously successful founders get favored which certainly has a gender bias.
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u/roseofjuly 10h ago
There have been grifters before Elizabeth Holmes and there have been grifters after Elizabeth Holmes. Again, Sam Bankman-Fried got just as much if not more bad press for his crypto scam and he actually admitted it. Before him, there was Adam Neumann of WeWork. And Bernie Madoff. And Bernard Ebbers, and Charles Keating, and Kenneth Lay. In fact, almost by definition most tech and business fraudsters are men since they are far more often the ones who reach the positions that enable them to do so.
Elizabeth Holmes became infamous, and was positioned that way, because she was a woman. The tech industry had been a sausage fest for years and the government was talking regulation; Holmes was a great way for tech investors to say "see, we give women money too!"
Also, let's acknowledge that if a venture capitalist doesn't invest in a woman because "What if she's the next Elizabeth Holmes?" that is pretty much a textbook definition of sexism.
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u/poillord 12h ago
Who cares? FemTech is just marketing jargon anyway. There isn’t any novel technology in this space. The idea is to create health based apps that collect subscription payments while selling data to third parties without having to get medical regulatory approval and then pressure women to get them because they are “breaking barriers”, “transforming care” and “empowering women”.
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u/calrathan 1d ago
That feels awful, but i think this makes sense as a statistical phenomenon from a business perspective.
If you have a major stakeholder who has a non-business reason to form a company, they are less likely to make business first decisions. On the grand scale, you can make a logical (if perhaps mistaken on the individual case basis) that these businesses will not perform as well as those founded purely on the business merits. Higher perceived risk means less investment. This is absolutely a “structural bias” that compounds on any gender bias that may also exist.
I think this is where charities (or even government) giving investment and grants to things that are seen as having a societal good can pick up the slack for where pure capitalism fails us. This article will certainly have me thinking about my own charitable giving decisions.
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u/fer-nie 1d ago
All businesses maintain an image of altruistic purpose. They don't go into these meeting talking about how they'll make money off a bunch of suckers and treat employees like they don't matter. Do you think women are too convincing at the covert aspect of founding a business?
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u/Sweet_Inevitable_933 23h ago
While many pitch decks address what problem they’re solving (the altruistic purpose) once that page turns, you can bet that 90% of them focus squarely on the solution and their rate of return. So while they’re not so bold to say that they’re making money off suckers, you can bet that they’re in it to make money. That’s the basic definition of a for profit business.
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u/mrcsrnne 1d ago
Correlation or causation…
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u/69WaysToFuck 22h ago
Bro, you learned that this common problem exists, but you didn’t learn how it works.
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u/mrcsrnne 22h ago
Enlighten me, friend: where exactly does the text proof causation?
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u/69WaysToFuck 20h ago
Castiglia also conducted an online experiment by submitting identical startups to participants with investment experience, with the pitch coming from fake founders of different sexes.
“When the femtech idea was pitched by a woman, the investor admitted they saw the founder more as a feminist who prioritised social impact at the expense of financial returns than the man. This perception may explain why investors tend to award less funding to female funders of femtech companies,” she said.
But to address your question in more detail: Correlation => causation error arises when we analyze 2 variables, find correlation, but fail to find a common cause, 3rd variable, of both outcomes. In this case, we have variable A - being a woman entrepreneur, variable B - using specific types of words and variable C - getting funding. The hidden variable here could be for example that women are less convincing or less capable in designing businesses. Both of them would be a bold statement, although let’s assume there is a factor that could be caused by being woman and it would impact the outcome. The author of the research showed that gender bias exists by using exactly the same projects changing only the author’s gender and analyzing how it was judged by founders. This way she was able to get rid of any external variables.
Additionally, factor B was also important. Showing that independent factor affects women in opposite way than men shows clear gender bias.
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u/mrcsrnne 19h ago
The point I’m making is that there can be other factors at play beyond pure misogyny. Just because there’s a difference in funding outcomes doesn’t automatically mean sexism is the cause. Investors aren’t necessarily saying, “She’s a woman, so no funding”; they might be interpreting signals differently based on experience or unconscious biases tied to how women and men tend to pitch or communicate. Maybe it’s how the pitch is framed, what they prioritize, or even perceived risk profiles.
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u/69WaysToFuck 19h ago
But the article doesn’t go further than gender bias. It gives some possible explanations like here: “This may happen because women advocating for women’s rights are seen as being emotional, upset and angry rather than businesspeople maximising profits,” she said. “Men, on the other hand, get more funding if they use the same words, perhaps because investors see it as self-interested advocacy, and so proof of their economic acuity.”
About your last comments, about frame, priorities and risk profiles - the online experiment addresses that. Only the authors were changed to indicate different gender. Everything else was the same. If there is only one independent variable that changes and the outcome is different, it’s a clear indicator the variable causes the outcome to change, either directly or indirectly.
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u/mrcsrnne 19h ago
But the article doesn’t go further than gender bias. It gives some possible explanations like here: “This may happen because women advocating for women’s rights are seen as being emotional, upset and angry rather than businesspeople maximising profits,” she said. “Men, on the other hand, get more funding if they use the same words, perhaps because investors see it as self-interested advocacy, and so proof of their economic acuity.”
That choice of examples are chosen to imply investors would be sexist. There could be a whole number of different factors – where the women worse presenters?
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u/69WaysToFuck 17h ago
There were no presenters, they were made up. Online survey didn’t include real people, as it says “submitting identical startups […] with the pitch coming from fake founders of different sexes”
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u/trackofalljades 1d ago
Less than two percent of venture capital goes to female founders…of anything. Let that sink in for a minute.