15 ms·

Gender, race, and entrepreneurship: A randomized field experiment on investors

137 points by sdan 6y ago

teodorlu 6y ago
I found the title to be phrased very weakly compared to the abstract. > We study gender and race in high-impact entrepreneurship using a tightly controlled randomized field experiment. We sent out 80,000 pitch emails introducing promising but fictitious start-ups to 28,000 venture capitalists and angels. Each email was sent by a fictitious entrepreneur with randomly assigned gender and race. Female entrepreneurs received 9% more interested replies than males pitching identical projects and Asians received 6% more than Whites. Our results suggest that investors do not discriminate against female or Asian entrepreneurs when evaluating unsolicited pitch emails and that future research on investor biases should focus on networks and in-person interactions.
- nairboon 6y ago
  >Our results suggest that investors do not discriminate against female or Asian entrepreneurs when evaluating unsolicited pitch emails... Are they implying that investors do discriminate against non-Asian males? Why write it the other way around.
  - jhgb 6y ago
    > Why write it the other way around. Maybe that's how the hypothesis under test was phrased?
    - throwaway894345 6y ago
      Indeed, reading further into the article they seem to be trying to answer, “At what stage in the funding pipeline do VCs become biased against women?”. It’s interesting that they don’t entertain the possibility that the gap might be caused by something other than bias (at least so far... I’m only 6 pages in). For example: > Combating bias requires understanding how and where it manifests. Combating bias requires understanding how and where it manifests. In light of the substantial gender imbalance in real-world investments, our results suggest a larger-than-expected bias against female entrepreneurs in other settings. They seem to be trying to combat bias without having even established that bias is the cause. Indeed, they take the statistically significant discrimination in favor of women in the initial stage as evidence that there must be even more bias against women in later stages. Given that they haven’t cited any research that would explain why it must be bias and not some other factor, I wonder why the paper is written with this assumption? Perhaps the authors felt it would be poorly received if it so much as kept an open mind about other possible causes? Or maybe this is just common knowledge in the field?
      - inglor_cz 6y ago
        "It’s interesting that they don’t entertain the possibility that the gap might be caused by something other than bias" Imagine a medicinal study that would concentrate on the hypothesis that sinners get cholera as a divine retribution for their sinful lives, and would not even entertain other possible causes, such as ... dirty drinking water. We would rightly locate such a study into, say, 1840, but definitely not 2021. That is where authors of this study belong mentally. Into the science of the era when Lincoln was young.
        throwaway894345 6y ago
        > We would rightly locate such a study into, say, 1840, but definitely not 2021. You give far too little credit to 1840 and far too much to 2021.
        inglor_cz 6y ago
        Look up 1854 Broad Street cholera outbreak. That was when the scientific breakthrough regarding bad water took place - and many actually refused to accept the results. Before that, the most "scientific" theory about cholera outbreaks was the miasma theory, but religious and pseudoreligious beliefs about divine punishment or influence of the stars were not fringe yet.
        throwaway894345 6y ago
        To be clear, my earlier comment was made in jest. I’m familiar with the Broad Street outbreak, but I’m not aware that religious theories were commonplace among scientists of the time. Notably that science wasn’t taken seriously by society more broadly doesn’t mean that the science of the time was “tainted by religion” (I say this as a religious person). Perhaps we’re making different points: mine is that science today is contaminated by a fervor resembling religion (though I don’t want to overstate the problem—overwhelmingly I think the effect is very low for the time being and I suspect it is highest in areas that are most pertinent to the ideology in question, which thankfully tends not yet to be the hard sciences or engineering disciplines lest our bridges fail, buildings collapse, and rockets explode on the launchpad).
  - sltkr 6y ago
    The whole thing is written from the assumption that investors discriminate against women and nonwhites, and that the purpose of research is to confirm this pre-existing belief, rather than find out the objective truth. > [..] future research on investor biases should focus on networks and in-person interactions. Read: the results contradicted our hypothesis, so rather than update our hypothesis, let's shift the focus of research in hopes that we find evidence to support it.
    - maccard 6y ago
      This is exactly how science should work. You can't perform a study, look at the data and pick a result that suits your bias. You're supposed to suggest a hypothesis, and conduct your experiment. If the results contradict your hypothesis, it doesn't mean the opposite of your hypothesis is true, simply that your hypothrsis was false, and that's ok. It's also more impressive that they have simply published their results, rather than burying them and running another experiment.
      - mc32 6y ago
        So what if they had found bias, do they say “look we found bias!” Or do they do additional studies to make sure it’s not an aberration or improper methods?
        sokoloff 6y ago
        It seems ideal if they did both of those things. Publish and make recommendations for future research, exactly as this paper does.
        maccard 6y ago
        Both. They publish and say "yes, we found bias on X, and our next study will verify via Y"
      - bluecalm 6y ago
        So you think the data is only relevant to the hypothesis you decided it's relevant for before you collect it? "Have you seen the fire sir?" "I have only seen smoke" "But have you seen the fire?" "It's irrelevant because I was only looking for smoke!". I mean I know they teach it in naive introductory experiment design in some soft science departments but c'mon it's neither smart nor correct. If you need a separate experiments for everything because otherwise you will run into "one of the 100 hypothesis is bound to be correct" problem then your priors are too weak, you're relying on getting lucky anyway and just end up discarding useful datapoints. If it's 5 out of 100 hypothesis fitting your data or 5 hypothesis out of 100 experiments passing "statistical significance" check doesn't matter at the end of the day. Both lead to shaky conclusions. The data being relevant depends on the experiment design (how it's collected). It doesn't depend on what you thought it's relevant for beforehand.
  - mc32 6y ago
    From omission it seems they reply less to black and white men. But these groups are large, however, sadly I don’t think it’d be easy to test on feigned education/class, so we won’t know what causes the bias.
    - dash2 6y ago
      They only did Asian versus white.
    - throwaway894345 6y ago
      If you’re curious about why they didn’t include black names: > After long and thoughtful consideration, we discarded the idea of assigning African-American names to our fictitious entrepreneurs. First, there has been a concern about the ability to disentangle race and socioeconomic perception by using distinctly African-American names (Fryer and Levitt (2004)). Second, and most importantly, African-American entrepreneurs are woefully underrepresented in high-impact entrepreneurship (less than 1%, see Gompers and Wang (2017)). This poses a substantial challenge for our setup, because even names that are disproportionately likely to be African-American in the general population (such as “Martin Jackson”) may not be perceived as African-American by investors in this context. Studying discrimination against African-Americans and other underrepresented minorities in high-impact entrepreneurship remains an important problem.
- mc32 6y ago
  My question would be why don’t they do a cursory ‘bg’ check on who these people are before replying? With so much scamming and the different phishing attacks, do you respond to random inquiries? That would seem rather naive, if true.
ArkanExplorer 6y ago
Same thing with job applications: "In an attempt to increase workplace diversity, the Australian public service implemented a .. trial removing all mention of gender and ethnicity from applications. It was found that removing gender from thousands of applications made women less likely to advance through the recruitment process compared to cases where gender was visible. The trial found that a woman's name on an application made the candidate 2.9% more likely to get job interviews. Leaders have now been told pause the trials" https://www.abc.net.au/news/2017-06-30/bilnd-recruitment-trial-to-improve-gender-equality-failing-study/8664888 https://www.abc.net.au/news/2017-06-30/bilnd-recruitment-tri... Its counter-productive to institute gender and diversity requirements at (tech) companies, where the core problem is at the fundamental immigration level. For example, 74.5% of H1B migrants to the USA are from India, and 78.4% of them are male: https://www.uscis.gov/sites/default/files/document/data/h-1b-petitions-by-gender-country-of-birth-fy2019.pdf https://www.uscis.gov/sites/default/files/document/data/h-1b... If we instituted gender and equality quotas at the migration level - ie. maximum 10% of the total yearly intake from any one country, and maximum 49% males from any one country, then we would a create a much more diverse talent pipeline.
- msoad 6y ago
  It will get even more India focused because of the latest laws.
  - hkt 6y ago
    Which are? (non-american here so I don't know about your immigration system)
    - msoad 6y ago
      They removed the caps on green card applications be country (I think, I don’t know exactly either)
    - rin72ka 6y ago
      Fairness for High-Skilled Immigrants Act - to eliminate the 7% per country-cap on green card applicants, among other things, which would have ended the painfully long wait for thousands of green card hopefuls.
adflux 6y ago
As long as there aren't as much women studying all kinds of engineering, you're going to see disparaties in the workforce. Lets stop trying to force equal distribution but rather equal opportunity. Funny thing to see is that as a country becomes MORE developed, women tend to be LESS inclined to attend STEM studies.
- mc32 6y ago
  This is the main problem. It’s hard. We could fix it if we were despotic and put people into tracks like the USSR who turned out lots of talented women in STEM, but were not and Film, TV and YT, etc highlight the easy life of glamour and fame, etc. So you end up with a million wanna be starlets and fewer women in STEM than statistics would have. Let “Hollywood” glamorize STEM, propagandize it and you’ll get a better pool of talent. Instead the proposition is to scrape the bottom of the barrel harder.
  - sol_invictus 6y ago
    Why exactly is it a problem if people are CHOOSING to do something on their own accord? Other than the political gestapo having to swallow their pride, I don't see freedom of career choice as a negative.
    - mc32 6y ago
      Because it’s somewhat artificial given Hollywood’s propaganda that glamorizes triviality, laziness and starlet glamour, etc.
    - inglor_cz 6y ago
      Some people want to sell their solution, so obviously they are looking for a problem. There is a lot of opportunity in the diversity industry, even though things like diversity training do not seem to have any effect, not even shielding companies from lawsuits. https://www.psychologytoday.com/us/blog/how-we-work/201203/diversity-training-doesnt-work https://www.psychologytoday.com/us/blog/how-we-work/201203/d...
  - 6y ago
dash2 6y ago
I wondered why they didn't report results for black versus white. Interestingly, they didn't run that: "After long and thoughtful consideration, we discarded the idea of assigning African-American names to our fictitious entrepreneurs. First, there has been a concern about the ability to disentangle race and socioeconomic perception by using distinctly African-American names (Fryer and Levitt (2004)). Second, and most importantly, African-American entrepreneurs are woefully underrepresented in high-impact entrepreneurship (less than 1%, see Gompers and Wang (2017)). This poses a substantial challenge for our setup, because even names that are disproportionately likely to be African-American in the general population (such as “Martin Jackson”) may not be perceived as African-American by investors in this context." It's an interesting point, are there any unambiguously African-American names? I wouldn't have guessed Martin Jackson was African-American, but I'm English.
- cameronh90 6y ago
  "are there any unambiguously African-American names" Something like DeShawn is almost certainly going to be a black person, but that would have socioeconomic perception issues as the text points out. It's an interesting point though. I had a look for data and couldn't really find much of use.
- Udik 6y ago
  > are there unambiguously African-American names? The part you quoted seems to say exactly that: there are unambiguously African-American names, but they are associated with low-class, low education backgrounds. Which might confuse the statistics as then the choice would not be purely about race but race and socioeconomic status.
  - dash2 6y ago
    That seems an odd take. Should we look for pure discrimination against any group, that isn't related precisely to the associations people make? I mean, it's possible. Faced with two people who (they believe) have identical backgrounds, I may discriminate against the black one purely because I dislike black people. But equally, I may have imperfect knowledge about two people, and knowing that one is black makes me associate them - consciously or not - with different things. That might then affect my willingness to give them a job. This is close to the difference between "taste-based" and "statistical" discrimination, in economists' terms.* Normally we care about both, so why not try to find out about it? It also seems unlikely that Asian names are free of associations, including e.g. associations about being hard working and/or nerdy, which might matter in a study like this. * Though, I don't think it's identical. You might dislike someone (taste-based discrimination) based on your associations with their ethnicity. And you might predict purely from their ethnicity, holding everything else constant, that they would do worse in a job (statistical discrimination). (E.g. if it's a sales job and you believe buyers are racist.)
jari_mustonen 6y ago
From abstract: ” Female entrepreneurs received 9% more interested replies than males pitching identical projects and Asians received 6% more than Whites. Our results suggest that investors do not discriminate against female or Asian entrepreneurs when evaluating unsolicited pitch emails and that future research on investor biases should focus on networks and in-person interactions.” In other words: The preferred results were not found (females are oppressed) so we ignore wrong-think results (males seem to be) and continue to hunt evidence for preferred results elsewhere.
- throwaway894345 6y ago
  Your summary is incorrect. They are not taking their results to indicate that their assumption is incorrect, but rather that the anti-female bias must be even stronger elsewhere to overcome the significant pro-female bias at initial stages.
  - damagednoob 6y ago
    I think the two of you are in violent agreement.
    - throwaway894345 6y ago
      We generally agree, though not violently :). I was pointing out that the effect is a bit bigger than the parent suggested. The authors aren’t abandoning their priors about anti-female bias; on the contrary they aren’t even recognizing that this evidence challenges those priors—they assume that the evidence to prove their priors must exist elsewhere and in sufficiently large effect as to counteract and dominate this pro-female bias. Note that I think it’s a fine thing to stick to one’s priors until they’ve been conclusively disproven, but recognition when the evidence obviously challenges one’s priors is my baseline for good faith. That said, I suspect this paper is written as it was because the authors thought their careers might be in danger for merely suggesting that the disparity might have a cause beyond discrimination.
    - geoduck14 6y ago
temptemptemp111 6y ago
Why should all genders and races be equal? Why won't they ever answer basic questions? They are all deluded liars - and this is plainly provable.
tinyhouse 6y ago
I never understand why classify people on their looks. Talking primarily about the US. There is such a wide spectrum of white people coming from different cultures. Also, you're considered Asian if you're a Chinese immigrant but also if you were born in the US to Chinese descent let's say. The main common thing between the two groups is looks. Same for Africans and African Americans who are both classified as blacks but have very different culture. Then there is the latino group who once the lose their accent and don't look so latino anymore they drift to the white group...
- musingsole 6y ago
  Arguably that's why the US has less severe racism/classism than much of the rest of the world (despite whatever pop narrative).
  - freeflight 6y ago
    I don't understand how that follows from the parent comment? The comment rightfully points out that in the US people are mostly classified by their superficial looks vs their actual ethnicity. Which leads to the situation that quite a diverse field of ethnicities and cultures are boiled down to very generalized "white/black/yellow/whatever" groups. Case in point: The recent shooting in a Colorado grocery store was, rather quickly, tried to be framed as "white extremism" due to skin color of the perpetrator and footage of his arrest going public. When said perpetrator is actually a Syrian who became a naturalized US citizen by the name of "Ahmad Al Aliwi Alissa, of Arvada", which is about the least "white" name one could come up with. Or for another example: The Nazis are regularly evoked as an example of racism and white supremacy, when the vast majority of people killed by the Nazis were actually "white", just not the right kind of "white". That's why in Europe racism often isn't based on color of skin, but rather on accents, ethnic looks and family names, as skin color alone is not enough to differentiate the out-group from the rest: A white British person is just as white as a white Polish person, yet that doesn't mean that the two of them will consider themselves as part of the same ethnic or cultural group. That idea only exists in the heads of people who evoke some allegedly unified "European culture" to stipulate that Europe is "racially homogeneous" because it's only made up of "white people".
throwaway894345 6y ago
This paragraph jumps out at me: > For our entrepreneurial email senders, we opted to use distinctively East-Asian (i.e., Asian) and Western-European (i.e., White) last names, both paired with common American first names that are distinctively female or male. Asians are overrepresented in the U.S. venture capital space, relative to their fraction of the U.S. population. Gompers and Wang (2017) report that 11% of U.S. entrepreneurs backed by venture capital firms are Asian, as are 11% of U.S. VCs, compared to 5% of the U.S. labor force. Despite this, past audit studies uniformly find strong discrimination against Asians (see Section 4 for more details). Correspondence studies that look at discrimination against both Asian and Black applicants often find that both groups face similar level of discrimination (e.g., Wood, Hales, Purdon, Sejersen, and Hayllar (2009); Booth, Leigh, and Varganova (2012); and Milkman, Akinola, and Chugh (2012)). This bias extends to Asians who do not appear to be foreigners. For example, Oreopoulos (2011) finds that Asians with English first names, Canadian university degrees, and several years of Canadian work experience get 21% fewer callbacks than similar White Canadian job applicants. That effect seems quite large. Doesn’t that indicate (rather conclusively?) a large amount of pro-Asian bias?
tomcooks 6y ago
Just like it happens with software development, in some specific contexts nobody needs to know who you are, what you identify with or what you do when naked for your results to be considered worthy of evaluation or compensation. Focus on letting your product shine and be free to be yourself in total privacy, it's an advantage many persons unfortunately don't have.
eruci 6y ago
6% is within the margin of error. We're spending so much time and energy to quantify various 'biases' ; only to find there is no bias. This is good. We're finally living is a post-racial society with no specific group discrimination. Now if western societies can move on from affirmative action policies and all the other nonsense at the top of their daily agenda while China leaves them all in the dust.
- lightgreen 6y ago
  > 6% is within the margin of error. No it’s not. The article has confidence intervals and findings are statistically significant. Unless you have some nonstandard definition of “margin of error”. While I generally I agree with you, let’s not come to correct conclusion using incorrect premises, this approach won’t help anyone.
rosmax_1337 6y ago
This is not surprising to me. For all I've seen "non-white non-male" is generally given priority in all kinds of areas, certainly in start-up interest. It's considered "hip" to associate with these "non-white non-male" groups, irregardless of their actual performance in whatever area they were prioritized. (To a certain extent at least, they can't be completely nonperforming) Being able to show that you have included these groups in whatever way your organization works, gives you advantages in press situations foremost, but also in other ways such as meeting arbitrary quotas set by higher-ups and HR dept.s in your organization. This is however, given two equal applications. Such as this study shows. I would be knocking down open doors to state that white men are over represented in the "STEM/Entrepreneurship" areas. What needs to be addressed is what the underlying cause is to this over representation. For all I see there are two potential causes: 1) Non-white non-males are given less ability to grow in the "STEM/Entrepreneurship" fields as students and/or children by society. 2) White men are able to outperform those other groups by some inherent quality. Worth noting is also that simply stating 2) as a potential cause of this difference is more or less a hatecrime in most settings, and academia would do well not to touch in attempting to work with that hypothesis if they wish to keep tenure and funding. Nevertheless, 1) seems to be partially disproved by studies just like the one above, showing that white men are in fact given less ability to grow in "STEM/Entrepreneurship" areas, as by the bias shown towards the Asian and Female applications.
- sanp 6y ago
  What is your basis for "white guys outperform other groups" in this specific scenario (entrepreneurship)? Perhaps VCs know that women and Asians outperform white guys and hence this bias.
  - DangitBobby 6y ago
    Are you sure that's the cause of the bias?
- DangitBobby 6y ago
  I think there are other options besides 1 and 2. For example, 3) non-white non-males experience different cultural pressures (or a different culture altogether) and have different expectations set by their family/peers/selves and and their careers when it comes time to work towards a profession.
sanp 6y ago
Is there a basis for the positive bias towards Asians and women here? If I have to follow the logic of a lot of statements in this thread perhaps VCs show a positive bias due to experience (better returns)? See https://www.google.com/amp/s/www.forbes.com/sites/allysonkapin/2019/01/28/10-stats-that-build-the-case-for-investing-in-women-led-startups/amp/ https://www.google.com/amp/s/www.forbes.com/sites/allysonkap...
icare_1er 6y ago
Many similar studies have been done and almost always destroy the leftists dogmas about X, Y or Z being oppressed. Belonging to a minority actually appears to boost your chances of being hired (shown by studies leaving, or hiding, the name of the applicants). Being a women in a company with a boss, reduces the gender paygap compared to what it is for freelancers: the more women are on their own (dentists, baker, founder of a sport's club, etc...), the bigger the gap compared to the male dentists, bakers, founders of sport's club... An interesting fact which leaves a lot of leftists in error 500 mode.
- klyrs 6y ago
  > ... destroy the leftists dogmas ... Please don't sneer, including at the rest of the community. Please don't use Hacker News for political or ideological battle. It tramples curiosity.
  - ip26 6y ago
    In a sense you might argue HN culture relishes the destruction of all dogmas. Left or otherwise.
    - klyrs 6y ago
      No, I might have argued that about usenet when I was first exposed to the internet in the early 90s, but I'm not nearly so naive today. Endless flamewars that never change minds. The same people saying the same shit time and time again. Dogmas don't die, they simply fade away when their adherents do.
      - ip26 6y ago
        Sure, we’re on the same page more or less :)
68020 6y ago
As a 'white' father of 3 who has been unemployed for the past few years I can tell you that this paper is sole crushing. Its a monument to how backwards common perception is to reality. Its a declaration from academia to never stop finding ways at punishing (me, my wife and 3 daughters) for my sin of being born white/male/pre1990. From what I have seen, people like me are under-represented in most office environments. Next time you are in an office (in NA at least), look around. Who are the black suited MBAs in charge not hiring? Even the abstract of the paper leads me to believe the the universe is a simulation because why else would it want to destroy opportunities for me and my family and simultaneously assuming, and tying to prove in a lab, that I am the modern Satan.
- analyst74 6y ago
  By creating racial tension, the upper class in control of media can distract people's anger away from class division.
  - undefined1 6y ago
    correct. it's the perfect way to divide the lower class and no coincidence that identity politics was embraced by the upper class after Occupy Wall St https://i.imgur.com/wusW5Rn.jpg https://i.imgur.com/wusW5Rn.jpg
  - achillesheels 6y ago
    It’s very profitable to pitch “neo-natal” progeny of recent immigration (>1965) with those with European ancestries which carry natural inter-generational momentum. Trying to find an “equalizing” rainbow trail is a violent red herring, yet has perpetual support because it’s sympathizing. Ending the drug war is better politics.
- smt88 6y ago
  > From what I have seen, people like me are under-represented in most office environments. This is not supported either by anecdote or by data. It's true for some environments, but absolutely not most.
- 6y ago
bitdizzy 6y ago
Since ssrn is like social science arxiv let's just throw preprints around. This paper examines the submitted one as well as another. https://arxiv.org/abs/2010.16084 https://arxiv.org/abs/2010.16084 This paper examines discrimination based on startup founders' gender, race, and age by early-stage investors, using two randomized controlled trials with real venture capitalists. The first experiment invites U.S. investors to evaluate multiple randomly generated startup profiles, which they know to be hypothetical, in order to be matched with real, high-quality startups from collaborating incubators. Investors can also donate money to randomly displayed startup teams to show their anonymous support during the COVID-19 pandemic. The second experiment sends hypothetical pitch emails with randomized startups' information to global venture capitalists and compares their email responses by utilizing a new email technology that tracks investors' detailed information acquisition behaviors. I find three main results: (i) Investors are biased towards female, Asian, and older founders in "lower contact interest" situations; while biased against female, Asian, and older founders in "higher contact interest" situations. (ii) These two experiments identify multiple coexisting sources of bias. Specifically, statistical discrimination is an important reason for "anti-minority" investors' contact and investment decisions, which was proved by a newly developed consistent decision-based heterogeneous effect estimator. (iii) There was a temporary, stronger bias against Asian founders during the COVID-19 outbreak, which started to fade in April 2020.
11thEarlOfMar 6y ago
I'd want to know the gender and race of the recipient VCs as well. Did female or Asian VCs have the same response profile as male or white VCs? Apparently, both female and male investors had a slight bias towards female entrepreneurs, pg. 31: "Both VCs and angels are more likely to respond to female entrepreneurs, although the difference is statistically significant only for angels (70% of our sample). Some angels in our sample are less experienced, as gauged by the number of investments they are recorded to have made. These less experienced angels have a statistically significant 13% higher interested reply rate to our female entrepreneurs, while the more experienced angels have an 8% higher reply rate and VCs have a 7% higher rate." It seems a positive outcome, however, I'd like to go one 'why' deeper. Why did the female investors prefer female entrepreneurs (see fig. 2, pg. 29)? Were their reasons different than the male investors' reasons? Also, why would less experienced investors be more likely to prefer female entrepreneurs than more experienced investors?
tacitusarc 6y ago
The author's correctly identify the limitation that the research does not account for bias subsequent to meeting the email authors, but as others have pointed out, it does not mention the limitation that they did not send out pitches proportional to the real world. This is an incredibly obvious causal explanation, and puts in a bad light the scientific integrity of the authors. Which is a shame, because their actual study is interesting and seems fairly rigorous. I read through the actual paper to see if they mentioned this limitation somewhere, not just the abstract, and could not find it. If someone else managed to spot some small clause buried in those pages, please mention where. On a different note, why are academic papers so unnecessarily long? There was a lot of repetition in this one.
ausbah 6y ago
I feel like this study would be more insightful if it looked at how many of these pitches went onto actually receive funding
- pottertheotter 6y ago
  That would be nice, but you can't have an experiment that does that. You can conduct empirical research to try to answer that question, but that has its own problems and limitation. Overall, like most research, this paper is a piece of data that provides a bit more understanding than we had before.
deleted 6y ago
[deleted]

137 points by sdan 6y ago

I found the title to be phrased very weakly compared to the abstract. > We study gender and race in high-impact entrepreneurship using a tightly controlled randomized field experiment. We sent out 80,000 pitch emails introducing promising but fictitious start-ups to 28,000 venture capitalists and angels. Each email was sent by a fictitious entrepreneur with randomly assigned gender and race. Female entrepreneurs received 9% more interested replies than males pitching identical projects and Asians received 6% more than Whites. Our results suggest that investors do not discriminate against female or Asian entrepreneurs when evaluating unsolicited pitch emails and that future research on investor biases should focus on networks and in-person interactions.

nairboon 6y ago
>Our results suggest that investors do not discriminate against female or Asian entrepreneurs when evaluating unsolicited pitch emails... Are they implying that investors do discriminate against non-Asian males? Why write it the other way around.
- jhgb 6y ago
  > Why write it the other way around. Maybe that's how the hypothesis under test was phrased?
  - throwaway894345 6y ago
    Indeed, reading further into the article they seem to be trying to answer, “At what stage in the funding pipeline do VCs become biased against women?”. It’s interesting that they don’t entertain the possibility that the gap might be caused by something other than bias (at least so far... I’m only 6 pages in). For example: > Combating bias requires understanding how and where it manifests. Combating bias requires understanding how and where it manifests. In light of the substantial gender imbalance in real-world investments, our results suggest a larger-than-expected bias against female entrepreneurs in other settings. They seem to be trying to combat bias without having even established that bias is the cause. Indeed, they take the statistically significant discrimination in favor of women in the initial stage as evidence that there must be even more bias against women in later stages. Given that they haven’t cited any research that would explain why it must be bias and not some other factor, I wonder why the paper is written with this assumption? Perhaps the authors felt it would be poorly received if it so much as kept an open mind about other possible causes? Or maybe this is just common knowledge in the field?
    - inglor_cz 6y ago
      "It’s interesting that they don’t entertain the possibility that the gap might be caused by something other than bias" Imagine a medicinal study that would concentrate on the hypothesis that sinners get cholera as a divine retribution for their sinful lives, and would not even entertain other possible causes, such as ... dirty drinking water. We would rightly locate such a study into, say, 1840, but definitely not 2021. That is where authors of this study belong mentally. Into the science of the era when Lincoln was young.
      - throwaway894345 6y ago
        > We would rightly locate such a study into, say, 1840, but definitely not 2021. You give far too little credit to 1840 and far too much to 2021.
        inglor_cz 6y ago
        Look up 1854 Broad Street cholera outbreak. That was when the scientific breakthrough regarding bad water took place - and many actually refused to accept the results. Before that, the most "scientific" theory about cholera outbreaks was the miasma theory, but religious and pseudoreligious beliefs about divine punishment or influence of the stars were not fringe yet.
        throwaway894345 6y ago
        To be clear, my earlier comment was made in jest. I’m familiar with the Broad Street outbreak, but I’m not aware that religious theories were commonplace among scientists of the time. Notably that science wasn’t taken seriously by society more broadly doesn’t mean that the science of the time was “tainted by religion” (I say this as a religious person). Perhaps we’re making different points: mine is that science today is contaminated by a fervor resembling religion (though I don’t want to overstate the problem—overwhelmingly I think the effect is very low for the time being and I suspect it is highest in areas that are most pertinent to the ideology in question, which thankfully tends not yet to be the hard sciences or engineering disciplines lest our bridges fail, buildings collapse, and rockets explode on the launchpad).
- sltkr 6y ago
  The whole thing is written from the assumption that investors discriminate against women and nonwhites, and that the purpose of research is to confirm this pre-existing belief, rather than find out the objective truth. > [..] future research on investor biases should focus on networks and in-person interactions. Read: the results contradicted our hypothesis, so rather than update our hypothesis, let's shift the focus of research in hopes that we find evidence to support it.
  - maccard 6y ago
    This is exactly how science should work. You can't perform a study, look at the data and pick a result that suits your bias. You're supposed to suggest a hypothesis, and conduct your experiment. If the results contradict your hypothesis, it doesn't mean the opposite of your hypothesis is true, simply that your hypothrsis was false, and that's ok. It's also more impressive that they have simply published their results, rather than burying them and running another experiment.
    - mc32 6y ago
      So what if they had found bias, do they say “look we found bias!” Or do they do additional studies to make sure it’s not an aberration or improper methods?
      - sokoloff 6y ago
        It seems ideal if they did both of those things. Publish and make recommendations for future research, exactly as this paper does.
      - maccard 6y ago
        Both. They publish and say "yes, we found bias on X, and our next study will verify via Y"
    - bluecalm 6y ago
      So you think the data is only relevant to the hypothesis you decided it's relevant for before you collect it? "Have you seen the fire sir?" "I have only seen smoke" "But have you seen the fire?" "It's irrelevant because I was only looking for smoke!". I mean I know they teach it in naive introductory experiment design in some soft science departments but c'mon it's neither smart nor correct. If you need a separate experiments for everything because otherwise you will run into "one of the 100 hypothesis is bound to be correct" problem then your priors are too weak, you're relying on getting lucky anyway and just end up discarding useful datapoints. If it's 5 out of 100 hypothesis fitting your data or 5 hypothesis out of 100 experiments passing "statistical significance" check doesn't matter at the end of the day. Both lead to shaky conclusions. The data being relevant depends on the experiment design (how it's collected). It doesn't depend on what you thought it's relevant for beforehand.
- mc32 6y ago
  From omission it seems they reply less to black and white men. But these groups are large, however, sadly I don’t think it’d be easy to test on feigned education/class, so we won’t know what causes the bias.
  - dash2 6y ago
    They only did Asian versus white.
  - throwaway894345 6y ago
    If you’re curious about why they didn’t include black names: > After long and thoughtful consideration, we discarded the idea of assigning African-American names to our fictitious entrepreneurs. First, there has been a concern about the ability to disentangle race and socioeconomic perception by using distinctly African-American names (Fryer and Levitt (2004)). Second, and most importantly, African-American entrepreneurs are woefully underrepresented in high-impact entrepreneurship (less than 1%, see Gompers and Wang (2017)). This poses a substantial challenge for our setup, because even names that are disproportionately likely to be African-American in the general population (such as “Martin Jackson”) may not be perceived as African-American by investors in this context. Studying discrimination against African-Americans and other underrepresented minorities in high-impact entrepreneurship remains an important problem.
mc32 6y ago
My question would be why don’t they do a cursory ‘bg’ check on who these people are before replying? With so much scamming and the different phishing attacks, do you respond to random inquiries? That would seem rather naive, if true.

ArkanExplorer 6y ago

Same thing with job applications: "In an attempt to increase workplace diversity, the Australian public service implemented a .. trial removing all mention of gender and ethnicity from applications. It was found that removing gender from thousands of applications made women less likely to advance through the recruitment process compared to cases where gender was visible. The trial found that a woman's name on an application made the candidate 2.9% more likely to get job interviews. Leaders have now been told pause the trials" https://www.abc.net.au/news/2017-06-30/bilnd-recruitment-trial-to-improve-gender-equality-failing-study/8664888 https://www.abc.net.au/news/2017-06-30/bilnd-recruitment-tri... Its counter-productive to institute gender and diversity requirements at (tech) companies, where the core problem is at the fundamental immigration level. For example, 74.5% of H1B migrants to the USA are from India, and 78.4% of them are male: https://www.uscis.gov/sites/default/files/document/data/h-1b-petitions-by-gender-country-of-birth-fy2019.pdf https://www.uscis.gov/sites/default/files/document/data/h-1b... If we instituted gender and equality quotas at the migration level - ie. maximum 10% of the total yearly intake from any one country, and maximum 49% males from any one country, then we would a create a much more diverse talent pipeline.

msoad 6y ago
It will get even more India focused because of the latest laws.
- hkt 6y ago
  Which are? (non-american here so I don't know about your immigration system)
  - msoad 6y ago
    They removed the caps on green card applications be country (I think, I don’t know exactly either)
  - rin72ka 6y ago
    Fairness for High-Skilled Immigrants Act - to eliminate the 7% per country-cap on green card applicants, among other things, which would have ended the painfully long wait for thousands of green card hopefuls.

adflux 6y ago

As long as there aren't as much women studying all kinds of engineering, you're going to see disparaties in the workforce. Lets stop trying to force equal distribution but rather equal opportunity. Funny thing to see is that as a country becomes MORE developed, women tend to be LESS inclined to attend STEM studies.

mc32 6y ago
This is the main problem. It’s hard. We could fix it if we were despotic and put people into tracks like the USSR who turned out lots of talented women in STEM, but were not and Film, TV and YT, etc highlight the easy life of glamour and fame, etc. So you end up with a million wanna be starlets and fewer women in STEM than statistics would have. Let “Hollywood” glamorize STEM, propagandize it and you’ll get a better pool of talent. Instead the proposition is to scrape the bottom of the barrel harder.
- sol_invictus 6y ago
  Why exactly is it a problem if people are CHOOSING to do something on their own accord? Other than the political gestapo having to swallow their pride, I don't see freedom of career choice as a negative.
  - mc32 6y ago
    Because it’s somewhat artificial given Hollywood’s propaganda that glamorizes triviality, laziness and starlet glamour, etc.
  - inglor_cz 6y ago
    Some people want to sell their solution, so obviously they are looking for a problem. There is a lot of opportunity in the diversity industry, even though things like diversity training do not seem to have any effect, not even shielding companies from lawsuits. https://www.psychologytoday.com/us/blog/how-we-work/201203/diversity-training-doesnt-work https://www.psychologytoday.com/us/blog/how-we-work/201203/d...
- 6y ago

dash2 6y ago

I wondered why they didn't report results for black versus white. Interestingly, they didn't run that: "After long and thoughtful consideration, we discarded the idea of assigning African-American names to our fictitious entrepreneurs. First, there has been a concern about the ability to disentangle race and socioeconomic perception by using distinctly African-American names (Fryer and Levitt (2004)). Second, and most importantly, African-American entrepreneurs are woefully underrepresented in high-impact entrepreneurship (less than 1%, see Gompers and Wang (2017)). This poses a substantial challenge for our setup, because even names that are disproportionately likely to be African-American in the general population (such as “Martin Jackson”) may not be perceived as African-American by investors in this context." It's an interesting point, are there any unambiguously African-American names? I wouldn't have guessed Martin Jackson was African-American, but I'm English.

cameronh90 6y ago
"are there any unambiguously African-American names" Something like DeShawn is almost certainly going to be a black person, but that would have socioeconomic perception issues as the text points out. It's an interesting point though. I had a look for data and couldn't really find much of use.
Udik 6y ago
> are there unambiguously African-American names? The part you quoted seems to say exactly that: there are unambiguously African-American names, but they are associated with low-class, low education backgrounds. Which might confuse the statistics as then the choice would not be purely about race but race and socioeconomic status.
- dash2 6y ago
  That seems an odd take. Should we look for pure discrimination against any group, that isn't related precisely to the associations people make? I mean, it's possible. Faced with two people who (they believe) have identical backgrounds, I may discriminate against the black one purely because I dislike black people. But equally, I may have imperfect knowledge about two people, and knowing that one is black makes me associate them - consciously or not - with different things. That might then affect my willingness to give them a job. This is close to the difference between "taste-based" and "statistical" discrimination, in economists' terms.* Normally we care about both, so why not try to find out about it? It also seems unlikely that Asian names are free of associations, including e.g. associations about being hard working and/or nerdy, which might matter in a study like this. * Though, I don't think it's identical. You might dislike someone (taste-based discrimination) based on your associations with their ethnicity. And you might predict purely from their ethnicity, holding everything else constant, that they would do worse in a job (statistical discrimination). (E.g. if it's a sales job and you believe buyers are racist.)

jari_mustonen 6y ago

From abstract: ” Female entrepreneurs received 9% more interested replies than males pitching identical projects and Asians received 6% more than Whites. Our results suggest that investors do not discriminate against female or Asian entrepreneurs when evaluating unsolicited pitch emails and that future research on investor biases should focus on networks and in-person interactions.” In other words: The preferred results were not found (females are oppressed) so we ignore wrong-think results (males seem to be) and continue to hunt evidence for preferred results elsewhere.

throwaway894345 6y ago
Your summary is incorrect. They are not taking their results to indicate that their assumption is incorrect, but rather that the anti-female bias must be even stronger elsewhere to overcome the significant pro-female bias at initial stages.
- damagednoob 6y ago
  I think the two of you are in violent agreement.
  - throwaway894345 6y ago
    We generally agree, though not violently :). I was pointing out that the effect is a bit bigger than the parent suggested. The authors aren’t abandoning their priors about anti-female bias; on the contrary they aren’t even recognizing that this evidence challenges those priors—they assume that the evidence to prove their priors must exist elsewhere and in sufficiently large effect as to counteract and dominate this pro-female bias. Note that I think it’s a fine thing to stick to one’s priors until they’ve been conclusively disproven, but recognition when the evidence obviously challenges one’s priors is my baseline for good faith. That said, I suspect this paper is written as it was because the authors thought their careers might be in danger for merely suggesting that the disparity might have a cause beyond discrimination.
  - geoduck14 6y ago

temptemptemp111 6y ago

Why should all genders and races be equal? Why won't they ever answer basic questions? They are all deluded liars - and this is plainly provable.

tinyhouse 6y ago

I never understand why classify people on their looks. Talking primarily about the US. There is such a wide spectrum of white people coming from different cultures. Also, you're considered Asian if you're a Chinese immigrant but also if you were born in the US to Chinese descent let's say. The main common thing between the two groups is looks. Same for Africans and African Americans who are both classified as blacks but have very different culture. Then there is the latino group who once the lose their accent and don't look so latino anymore they drift to the white group...

musingsole 6y ago
Arguably that's why the US has less severe racism/classism than much of the rest of the world (despite whatever pop narrative).
- freeflight 6y ago
  I don't understand how that follows from the parent comment? The comment rightfully points out that in the US people are mostly classified by their superficial looks vs their actual ethnicity. Which leads to the situation that quite a diverse field of ethnicities and cultures are boiled down to very generalized "white/black/yellow/whatever" groups. Case in point: The recent shooting in a Colorado grocery store was, rather quickly, tried to be framed as "white extremism" due to skin color of the perpetrator and footage of his arrest going public. When said perpetrator is actually a Syrian who became a naturalized US citizen by the name of "Ahmad Al Aliwi Alissa, of Arvada", which is about the least "white" name one could come up with. Or for another example: The Nazis are regularly evoked as an example of racism and white supremacy, when the vast majority of people killed by the Nazis were actually "white", just not the right kind of "white". That's why in Europe racism often isn't based on color of skin, but rather on accents, ethnic looks and family names, as skin color alone is not enough to differentiate the out-group from the rest: A white British person is just as white as a white Polish person, yet that doesn't mean that the two of them will consider themselves as part of the same ethnic or cultural group. That idea only exists in the heads of people who evoke some allegedly unified "European culture" to stipulate that Europe is "racially homogeneous" because it's only made up of "white people".

throwaway894345 6y ago

This paragraph jumps out at me: > For our entrepreneurial email senders, we opted to use distinctively East-Asian (i.e., Asian) and Western-European (i.e., White) last names, both paired with common American first names that are distinctively female or male. Asians are overrepresented in the U.S. venture capital space, relative to their fraction of the U.S. population. Gompers and Wang (2017) report that 11% of U.S. entrepreneurs backed by venture capital firms are Asian, as are 11% of U.S. VCs, compared to 5% of the U.S. labor force. Despite this, past audit studies uniformly find strong discrimination against Asians (see Section 4 for more details). Correspondence studies that look at discrimination against both Asian and Black applicants often find that both groups face similar level of discrimination (e.g., Wood, Hales, Purdon, Sejersen, and Hayllar (2009); Booth, Leigh, and Varganova (2012); and Milkman, Akinola, and Chugh (2012)). This bias extends to Asians who do not appear to be foreigners. For example, Oreopoulos (2011) finds that Asians with English first names, Canadian university degrees, and several years of Canadian work experience get 21% fewer callbacks than similar White Canadian job applicants. That effect seems quite large. Doesn’t that indicate (rather conclusively?) a large amount of pro-Asian bias?

tomcooks 6y ago

Just like it happens with software development, in some specific contexts nobody needs to know who you are, what you identify with or what you do when naked for your results to be considered worthy of evaluation or compensation. Focus on letting your product shine and be free to be yourself in total privacy, it's an advantage many persons unfortunately don't have.

eruci 6y ago

6% is within the margin of error. We're spending so much time and energy to quantify various 'biases' ; only to find there is no bias. This is good. We're finally living is a post-racial society with no specific group discrimination. Now if western societies can move on from affirmative action policies and all the other nonsense at the top of their daily agenda while China leaves them all in the dust.

lightgreen 6y ago
> 6% is within the margin of error. No it’s not. The article has confidence intervals and findings are statistically significant. Unless you have some nonstandard definition of “margin of error”. While I generally I agree with you, let’s not come to correct conclusion using incorrect premises, this approach won’t help anyone.

rosmax_1337 6y ago

This is not surprising to me. For all I've seen "non-white non-male" is generally given priority in all kinds of areas, certainly in start-up interest. It's considered "hip" to associate with these "non-white non-male" groups, irregardless of their actual performance in whatever area they were prioritized. (To a certain extent at least, they can't be completely nonperforming) Being able to show that you have included these groups in whatever way your organization works, gives you advantages in press situations foremost, but also in other ways such as meeting arbitrary quotas set by higher-ups and HR dept.s in your organization. This is however, given two equal applications. Such as this study shows. I would be knocking down open doors to state that white men are over represented in the "STEM/Entrepreneurship" areas. What needs to be addressed is what the underlying cause is to this over representation. For all I see there are two potential causes: 1) Non-white non-males are given less ability to grow in the "STEM/Entrepreneurship" fields as students and/or children by society. 2) White men are able to outperform those other groups by some inherent quality. Worth noting is also that simply stating 2) as a potential cause of this difference is more or less a hatecrime in most settings, and academia would do well not to touch in attempting to work with that hypothesis if they wish to keep tenure and funding. Nevertheless, 1) seems to be partially disproved by studies just like the one above, showing that white men are in fact given less ability to grow in "STEM/Entrepreneurship" areas, as by the bias shown towards the Asian and Female applications.

sanp 6y ago
What is your basis for "white guys outperform other groups" in this specific scenario (entrepreneurship)? Perhaps VCs know that women and Asians outperform white guys and hence this bias.
- DangitBobby 6y ago
  Are you sure that's the cause of the bias?
DangitBobby 6y ago
I think there are other options besides 1 and 2. For example, 3) non-white non-males experience different cultural pressures (or a different culture altogether) and have different expectations set by their family/peers/selves and and their careers when it comes time to work towards a profession.

sanp 6y ago

Is there a basis for the positive bias towards Asians and women here? If I have to follow the logic of a lot of statements in this thread perhaps VCs show a positive bias due to experience (better returns)? See https://www.google.com/amp/s/www.forbes.com/sites/allysonkapin/2019/01/28/10-stats-that-build-the-case-for-investing-in-women-led-startups/amp/ https://www.google.com/amp/s/www.forbes.com/sites/allysonkap...

icare_1er 6y ago

Many similar studies have been done and almost always destroy the leftists dogmas about X, Y or Z being oppressed. Belonging to a minority actually appears to boost your chances of being hired (shown by studies leaving, or hiding, the name of the applicants). Being a women in a company with a boss, reduces the gender paygap compared to what it is for freelancers: the more women are on their own (dentists, baker, founder of a sport's club, etc...), the bigger the gap compared to the male dentists, bakers, founders of sport's club... An interesting fact which leaves a lot of leftists in error 500 mode.

klyrs 6y ago
> ... destroy the leftists dogmas ... Please don't sneer, including at the rest of the community. Please don't use Hacker News for political or ideological battle. It tramples curiosity.
- ip26 6y ago
  In a sense you might argue HN culture relishes the destruction of all dogmas. Left or otherwise.
  - klyrs 6y ago
    No, I might have argued that about usenet when I was first exposed to the internet in the early 90s, but I'm not nearly so naive today. Endless flamewars that never change minds. The same people saying the same shit time and time again. Dogmas don't die, they simply fade away when their adherents do.
    - ip26 6y ago
      Sure, we’re on the same page more or less :)

68020 6y ago

As a 'white' father of 3 who has been unemployed for the past few years I can tell you that this paper is sole crushing. Its a monument to how backwards common perception is to reality. Its a declaration from academia to never stop finding ways at punishing (me, my wife and 3 daughters) for my sin of being born white/male/pre1990. From what I have seen, people like me are under-represented in most office environments. Next time you are in an office (in NA at least), look around. Who are the black suited MBAs in charge not hiring? Even the abstract of the paper leads me to believe the the universe is a simulation because why else would it want to destroy opportunities for me and my family and simultaneously assuming, and tying to prove in a lab, that I am the modern Satan.

analyst74 6y ago
By creating racial tension, the upper class in control of media can distract people's anger away from class division.
- undefined1 6y ago
  correct. it's the perfect way to divide the lower class and no coincidence that identity politics was embraced by the upper class after Occupy Wall St https://i.imgur.com/wusW5Rn.jpg https://i.imgur.com/wusW5Rn.jpg
- achillesheels 6y ago
  It’s very profitable to pitch “neo-natal” progeny of recent immigration (>1965) with those with European ancestries which carry natural inter-generational momentum. Trying to find an “equalizing” rainbow trail is a violent red herring, yet has perpetual support because it’s sympathizing. Ending the drug war is better politics.
smt88 6y ago
> From what I have seen, people like me are under-represented in most office environments. This is not supported either by anecdote or by data. It's true for some environments, but absolutely not most.
6y ago

bitdizzy 6y ago

Since ssrn is like social science arxiv let's just throw preprints around. This paper examines the submitted one as well as another. https://arxiv.org/abs/2010.16084 https://arxiv.org/abs/2010.16084 This paper examines discrimination based on startup founders' gender, race, and age by early-stage investors, using two randomized controlled trials with real venture capitalists. The first experiment invites U.S. investors to evaluate multiple randomly generated startup profiles, which they know to be hypothetical, in order to be matched with real, high-quality startups from collaborating incubators. Investors can also donate money to randomly displayed startup teams to show their anonymous support during the COVID-19 pandemic. The second experiment sends hypothetical pitch emails with randomized startups' information to global venture capitalists and compares their email responses by utilizing a new email technology that tracks investors' detailed information acquisition behaviors. I find three main results: (i) Investors are biased towards female, Asian, and older founders in "lower contact interest" situations; while biased against female, Asian, and older founders in "higher contact interest" situations. (ii) These two experiments identify multiple coexisting sources of bias. Specifically, statistical discrimination is an important reason for "anti-minority" investors' contact and investment decisions, which was proved by a newly developed consistent decision-based heterogeneous effect estimator. (iii) There was a temporary, stronger bias against Asian founders during the COVID-19 outbreak, which started to fade in April 2020.

11thEarlOfMar 6y ago

I'd want to know the gender and race of the recipient VCs as well. Did female or Asian VCs have the same response profile as male or white VCs? Apparently, both female and male investors had a slight bias towards female entrepreneurs, pg. 31: "Both VCs and angels are more likely to respond to female entrepreneurs, although the difference is statistically significant only for angels (70% of our sample). Some angels in our sample are less experienced, as gauged by the number of investments they are recorded to have made. These less experienced angels have a statistically significant 13% higher interested reply rate to our female entrepreneurs, while the more experienced angels have an 8% higher reply rate and VCs have a 7% higher rate." It seems a positive outcome, however, I'd like to go one 'why' deeper. Why did the female investors prefer female entrepreneurs (see fig. 2, pg. 29)? Were their reasons different than the male investors' reasons? Also, why would less experienced investors be more likely to prefer female entrepreneurs than more experienced investors?

tacitusarc 6y ago

The author's correctly identify the limitation that the research does not account for bias subsequent to meeting the email authors, but as others have pointed out, it does not mention the limitation that they did not send out pitches proportional to the real world. This is an incredibly obvious causal explanation, and puts in a bad light the scientific integrity of the authors. Which is a shame, because their actual study is interesting and seems fairly rigorous. I read through the actual paper to see if they mentioned this limitation somewhere, not just the abstract, and could not find it. If someone else managed to spot some small clause buried in those pages, please mention where. On a different note, why are academic papers so unnecessarily long? There was a lot of repetition in this one.

ausbah 6y ago

I feel like this study would be more insightful if it looked at how many of these pitches went onto actually receive funding

pottertheotter 6y ago
That would be nice, but you can't have an experiment that does that. You can conduct empirical research to try to answer that question, but that has its own problems and limitation. Overall, like most research, this paper is a piece of data that provides a bit more understanding than we had before.

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