A common thing heard is that women are more risk-adverse than men. Is that really true? And is it true when it comes to investing? Do we have the full story here?
I came across a study that examined the affect of gender stereotypes on the investment decision-making of successful women.
“Researchers found that when an angel investment group had a small percentage of women, the group was more cautious about investing. However, when women comprised more than 10 percent of the investment group, their presence became associated with increased investments.”
Previous research generally showed that women were more cautious in their investment decisions, however it appears that more recent study took into consideration influences around them and where they are relative to other investors. The findings are very interesting and appears to be due to something the researchers referred to as a a “stereotype threat”: “when a stereotype exists about a person, that person will behave in a manner consistent with that stereotype when they are in a situation that highlights, or accentuates, this aspect of their status, whether that is gender, race or ethnicity.”
“In the context of this research, this means that when there are few women in an angel group, the stereotype of cautious investing is accentuated. As the number of women increases, there is less of a stereotype -– there are more women so they are more recognized for their ability as investors and less because of their gender,” said Jeffrey Sohl, director of the UNH Center for Venture Research. The research was conducted by Sohl and John Becker-Blease, of Oregon State University. It was presented in the July 2011 issue of the journal “Entrepreneurship, Theory and Practice” and was based on data sampled from 183 angel investment groups from 2000 to 2006 collected by the Center for Venture Research, which holds the most complete database of angel groups in the United States.
The full article is available for purchase through Highbeam Research.
On average, in the US, women make up 12% of all angel investors. I’ll be attending the Angel Forum workshop on March 26th in Vancouver and it will be curious to see how many women will be in attendance. My business, Pique Ventures, which provides services to support women making angel investments, caters to serving the variety of financial, life, and giving goals that a woman investor may have. We specialize in an integrated investment decision-making approach, managing risk, making matches and building relationships between investors and entrepreneurs. Pique Ventures’ mission is to help women invest in businesses, confidently and passionately.