Clearing the hurdles: Revisiting the under-performance hypothesis for women-led VC funded firms

Candida G. Brush and Amanda B. Elam

Journal of Small Business Management, 2024, vol. 62, issue 5, 2287-2321

Abstract: This study revisits the female underperformance hypothesis by investigating the influence of CEO gender on key performance factors for VC funded firms from 2011–2016. We used a matched case-control sample approach to reduce the confounding influence of industry sector on gender differences for four key performance outcomes – total capital, raised total rounds of funding, successful exit or business failure. Results show gender does not predict funding raised or firm performance, and that key legitimacy markers, including elite education, external endorsement and high-status investors, offset potential gender discounts for women-led firms. Implications are that the female underperformance hypothesis should not be perpetuated as a legitimizing myth or stereotype predicting performance of women entrepreneurs in management studies. In practice, VCs should not rule out investments or expect poor performance based on CEO gender.

Date: 2024
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DOI: 10.1080/00472778.2023.2229868

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