THE ANALYSIS REVEALED THAT ALTHOUGH GENDER ALONE DIDN’T INFLUENCE SUCCESS, PEOPLE WITH A HIGH DEGREE OF STEREOTYPICALLY FEMALE BEHAVIOR WERE LESS LIKELY THAN OTHERS TO SUCCEED AT PITCHING.

Trust beats competence. In a second study, Balachandra worked with a California-based network of angel investors who gather monthly to hear 20-minute pitches from start-ups. Immediately after each pitch, the investors filled out detailed surveys about their reactions and indicated whether they wanted to send the company through to due diligence (the next step before investing). The results showed that interest in a start-up was driven less by judgments that the founder was competent than by perceptions about character and trustworthiness. Balachandra says that this makes sense: A CEO who lacks a skill-based competency, such as a financial or technical background, can overcome that through training or by hiring the right complementary talent, but character is less malleable. And because angel investors often work closely for several years with entrepreneurs on highly risky ventures, they seek evidence that their new partners will behave in honest, straightforward ways that don’t heighten the risks. In fact, the research showed that entrepreneurs who projected trustworthiness increased their odds of being funded by 10 per cent. Coachability matters. Particularly among angel investors, who get involved earlier than traditional VCs do, decisions aren’t driven only by potential returns; they are driven by ego as well. Most angel investors are experienced entrepreneurs who want to be hands-on mentors, so they prefer investments where they can add value. For that to happen, a founder must be receptive to feedback and have the potential to be a good protégé.

Balachandra reached this conclusion by conducting surveys and evaluating video sessions with the same California investors’ network. Coders examined the videos for behaviours, such as nodding and smiling in response to questions, indicating that founders were open to ideas. When analysis and survey results indicated that they were, and when the investor was experienced in the relevant industry – giving him or her knowledge that could add value – the company was more likely to move on to due diligence.

Gender stereotypes

play a role. In Balachandra’s first job in venture capital, she rarely encountered other women, whether among VCs or among entrepreneurs; in fact, she says, 94 per cent of venture capitalists are male. (She then worked at an allfemale firm that focused on funding start-ups headed by women.) In her research, she and her colleagues used videos from the MIT competition to test the perception that VCs are biased against female entrepreneurs. Coders noted whether the presenter was male or female and then measured whether he or she exhibited stereotypically masculine behaviours (such as forcefulness, dominance, aggressiveness, and assertiveness) or stereotypically female ones (warmth, sensitivity, expressiveness, and emotionality). The analysis revealed that although gender alone didn’t influence success, people with a high degree of stereotypically female behaviour were less likely than others to succeed at pitching. “The study shows that VCs are biased against femininity,” Balachandra says. “They don’t want to see particular behaviours, so if you’re overly emotional or expressive, you should consider practicing to avoid those things.”

The most important takeaway for entrepreneurs is this: You should approach the pitching process less as a formal presentation and more as an improvisational conversation in which attitude and mindset matter more than business fundamentals. Listen hard to the questions you’re asked, and be thoughtful in your responses. If you don’t know something, offer to find out – or ask the investor what he or she thinks. Don’t react defensively to critical questions. And instead of obsessing over the specifics of your pitch deck, Balachandra advises, “think about being calm, cool, and open to feedback.”