Abstract
The Indian startup ecosystem, the third-largest globally, reveals significant gender disparities in entrepreneurial representation and funding. While only 14% of Indian startups have women founders, ventures solely led by women receive a mere 1.5% of total funding. This study investigates the persistence of this gender gap by examining investor-driven biases through an observational field-based approach. Unlike existing research that attributes funding disparities to deficits in women’s entrepreneurial traits, this study shifts focus to the systemic prejudices exhibited by investors during funding interactions.
Using qualitative narrative inquiry, 42 investor-founder conversations were observed and analyzed with the Linguistic Inquiry and Word Count (LIWC-22) tool. The study uncovered stark differences in linguistic and psychosocial patterns in investor interactions. Conversations with women founders displayed higher instances of negative sentiment, anxiety, and anger, while interactions with men reflected greater positivity, politeness, and trust. Furthermore, men founders were more likely to benefit from informal, rapport-building exchanges that strengthened social ties and reinforced favourable funding outcomes.
Anchored in social role congruity and homophily theories, the findings illustrate how institutionalized biases influence decision-making processes, limiting women entrepreneurs’ access to capital. This field-based evidence contributes to the entrepreneurship literature by exposing the embedded gender stereotypes in investor behaviours and their impact on funding outcomes. To foster equitable opportunities, the study recommends increasing gender diversity among investors, training to counteract unconscious biases, and implementing inclusive evaluation practices. By addressing these systemic issues, the entrepreneurial ecosystem can better support women-led ventures, enhancing innovation and economic growth.