Financing The Next VC-Backed Startup: The Role of Gender

49 Pages Posted: 19 Apr 2024 Last revised: 21 Apr 2024

See all articles by Camille Hebert

Camille Hebert

University of Toronto - Rotman School of Management

Heather Tookes

Yale University - Yale School of Management; Yale University - International Center for Finance

Emmanuel Yimfor

Columbia Business School

Date Written: March 15, 2024

Abstract

Is there a gender gap in the serial founding of VC-backed startups? We address this question by introducing a new empirical design that exploits differences in future funding outcomes for men and women who cofounded the same startup. We find substantial gender gaps, both on average and following failure or success of the current startup. Following failure, our estimates imply that women are 22.5 percent less likely to found another VC-backed startup compared to their cofounders who are men. Among those who do found another VC-backed firm, women raise 24.6 percent less capital. Moreover, the results of an outcome test show no gender difference in the success probabilities of subsequent startups, despite the large funding gap. The gender gaps that we observe appear to be driven by unequal treatment by investors and not by gender differences in quality or founder preferences. In fact, our analysis of potential supply-side channels reveals striking negative spillovers following investors’ experiences with other women-founded startups.

Keywords: Serial entrepreneurship, gender gap, venture capital-backed startups

JEL Classification: G24, J16, L26

Suggested Citation

Hebert, Camille and Tookes, Heather and Yimfor, Emmanuel, Financing The Next VC-Backed Startup: The Role of Gender (March 15, 2024). Available at SSRN: https://ssrn.com/abstract=4784414 or http://dx.doi.org/10.2139/ssrn.4784414

Camille Hebert (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Heather Tookes

Yale University - Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Yale University - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States

Emmanuel Yimfor

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
62
Abstract Views
273
Rank
661,552
PlumX Metrics