Sizing Up Entrepreneurial Potential: Gender Differences in Communication and Investor Perceptions of Long-Term Growth and Scalability

Abstract

Female entrepreneurs have been found to face disadvantages when compared with male entrepreneurs, especially in acquiring the financial resources needed to sustain and grow their ventures. Across three studies, we examine how disparities in funding outcomes may be due to differences in how entrepreneurs communicate their ventures, whereby female entrepreneurs have a tendency to use more concrete language when describing their ventures than their male counterparts. We find that the use of abstract speech affects investors’ perceptions of which ventures are oriented toward long-term growth and scalability, which in turn affects the likelihood that a venture will receive investment. We conclude with a discussion of the important role of communication style as a key mediating mechanism in influencing investor cognition.