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

50 Pages Posted: 23 Apr 2019 Last revised: 5 Nov 2019

See all articles by Sabrina Howell

Sabrina Howell

New York University (NYU) - Leonard N. Stern School of Business

Ramana Nanda

Harvard University - Entrepreneurial Management Unit

Multiple version iconThere are 2 versions of this paper

Date Written: October 22, 2019

Abstract

Exploiting random variation in the number of venture capitalist (VC) judges assigned to panels at Harvard Business School’s New Venture Competition (NVC) between 2000 and 2015, we find that exposure to more VC judges increases male participants’ chances of founding a VC-backed startup after HBS much more than this exposure increases female participants’ chances. A survey suggests this is in part because male participants more often proactively reach out to VC judges after the NVC. Our results suggest that networking frictions are an important reason men benefit more than women from exposure to VCs. Such frictions can help explain part of the gender gap in entrepreneurship, and also have implications for how to design networking opportunities to facilitate financing of the best (rather than just the best networked) ideas.

Suggested Citation

Howell, Sabrina and Nanda, Ramana, Networking Frictions in Venture Capital, and the Gender Gap in Entrepreneurship (October 22, 2019). Harvard Business School Entrepreneurial Management Working Paper No. 19-105. Available at SSRN: https://ssrn.com/abstract=3376211 or http://dx.doi.org/10.2139/ssrn.3376211

Sabrina Howell

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
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HOME PAGE: http://www.sabrina-howell.com

Ramana Nanda (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Boston, MA 02163
United States

HOME PAGE: http://www.people.hbs.edu/rnanda

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