Unconscious Bias and Venture Funding — An Interview with Dr. Maya Ackerman


While Miller Center for Social Entrepreneurship has an excellent track record of helping social entrepreneurs gain access to capital, current research finds persistent bias inside the investor community, especially against founder teams led by women. The resulting inequity impacts not only the amount of capital raised by founding teams, but also the types of capital invested.

Under a three-year grant from Chevron, Miller Center is conducting research and developing novel training methods for understanding and overcoming entrenched biases in the start-up ecosystem. We spoke with Santa Clara University professor Dr. Maya Ackerman, who is leading the research, to learn more about the work she is doing.

Miller Center: Can you level set for us and explain why unconscious bias is an issue, especially for women, as they seek investment?

Dr. Maya Ackerman: We all possess biases, often unconscious, that shape our perceptions and judgments. These biases are deeply ingrained in our culture. Biased images in media, as well as early socialization, contribute to the formation of strong associations about what is considered normal for men and women. Unconscious biases are more threatening because they are harder to detect. They can be developed by simply storing experiences that end up shaping our beliefs and later influencing decision making.

It’s important to note that holding biases doesn’t necessarily mean a person is intentionally harmful or mean-spirited; biases are a natural part of growing up in our society. However, to overcome biases, it is crucial to become aware of them within ourselves.

When you think of a CEO, who comes to mind? Most likely, someone such as Steve Jobs or Elon Musk. It is unlikely that you thought of Anne Wojcicki or Melanie Perkins, both founding CEOs of unicorn companies. This is a reflection of the culture we live in. Jobs and Musk are household names, while Wojcicki and Perkins are not.

Like everyone else, investors are also susceptible to these cultural influences and biases. Despite their efforts to identify promising founders, they may struggle to imagine a woman leading an industry or making a significant impact, even if she is highly qualified. This bias becomes particularly evident in the venture capital allocation process, where investors often rely on gut feelings and quick judgments due to their busy schedules. Consequently, women are frequently overlooked and have significantly fewer opportunities to attain funding.

Miller Center: Can you provide an overview of the research project you are conducting as part of the Miller Center/Chevron initiative, and why it is important?

Dr. Maya Ackerman: Women face significant underfunding, with investors often favoring less qualified men over highly capable women. My research lab has previously demonstrated that this bias persists even when women have more business experience and education than their male counterparts. The difficulty in addressing this problem is well-known. Simply raising awareness and sharing statistics about successful female CEOs, who often match or outperform their male counterparts, doesn’t seem to effectively combat the bias.

The challenges stem from how venture capital operates in practice. Investors burdened with limited time tend to rely on shortcuts that are shaped by historical biases. Investors implicitly seek personality traits and behaviors based on male role models, such as high confidence and competitiveness. Unfortunately, when women exhibit these same traits, they are often seen as unlikable rather than high-potential leaders.

How do we solve this problem? How do we enable investors to recognize high potential female entrepreneurs? That is the goal of this initiative.

Our approach is rooted in rigorous research, and our primary objective is to disseminate this knowledge in an effective manner. Our two-part initiative involves both informing participants and empowering them to apply what they have learned, enabling them to engage in reflection and practical application.

Miller Center: What can you tell us about Phase I, and the key learnings you uncovered?

Dr. Maya Ackerman: This year we’ve been focusing on developing a framework for helping investors identify high potential female founders. Based on extensive analysis of the research literature — analyzing hundreds of research papers across business, management, neuroscience, and psychology research literature, along with a careful study of female founder/CEOs of unicorn companies — we have identified competencies that are associated with high potential female entrepreneurs.

The four competencies are empathy, collaboration, humility, and high context thinking. Research indicates these traits are found more in women than men.

Empathy promotes listening and plays a crucial role in enhancing communication; leaders who listen more have additional information to make sound decisions.

Collaboration has a vital role in power sharing and harnesses the strength of collective intelligence, enabling innovative problem-solving, better decision-making and improved outcomes.

Individuals who have humility are self-aware in their abilities, acknowledge mistakes and imperfections. Humility increases team creativity because of the safe psychological environment it creates which brings positive returns to organizations.

Higher context thinking takes into account both emotional and intellectual intelligence and the ability to ‘connect the dots.’ During stressful situations, women are able to process more information without it affecting cooperative behavior and even increasing it.

Miller Center: What’s next for the research project?

Dr. Maya Ackerman: The next phase involves engaging with investors to obtain feedback and test our model. This is essential for developing a succinct and effective program that is specifically tailored to investors. The program will subsequently be conducted in person and placed online for further dissemination.

The training program that we’re developing goes beyond simply raising awareness about bias and its consequences. Rather, it equips participants with the necessary tools to actively manage their biases, modify their behaviors, and engage in self-reflection to track their personal growth and development.

Miller Center: What do you hope to achieve?

Our goal is to create concise and effective training programs for investors that will make a significant impact on the amount of funding invested in female-led ventures. We want to meet investors where they are and devise programs that increase investments in women while helping investors achieve their primary objective: identifying high-potential founders and improving their portfolios.

The bigger picture is to foster a world where women can access the necessary resources to establish and expand their ventures, enabling them to play a greater role in shaping our society.