Journal
JOURNAL OF BUSINESS VENTURING
Volume 39, Issue 1, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jbusvent.2023.106368
Keywords
Female representation; Social categorization; Decision-making group; Venture capital; Funding of woman-led businesses; Gender equality; Qualitative analysis
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This study examines the influence of female representation in decision-making groups of venture capital firms on the firms' decision to fund woman-led businesses. The findings suggest that in the male-dominated industry, decision-making groups with higher female representation are less likely to fund woman-led businesses. However, this negative effect can be mitigated when the decision-making group includes politically neutral members or members with shared prior employment affiliations.
We examine whether and when female representation in decision-making groups of venture capital firms affects the firms' decision to fund woman-led businesses. By developing an intra- and inter-group categorization framework for group decision-making, we argue that, in the maledominated venture capital industry, decision-making groups with higher female representation are less likely to fund woman-led businesses. However, this negative effect is mitigated when the decision-making group has more politically neutral members or when members have more shared prior employment affiliations. Using a longitudinal panel dataset of funding decisions by 151 U. S.-based venture capital firms, the empirical analyses support our theoretical predictions. We also enriched and complemented our empirical findings with qualitative evidence.
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