Investors in tech startups do not trust female founders, according to new research from Vienna University of Economics and Business (WU).

The study, conducted by Sonja Sperber from Vienna University of Economics and Business her co-author Christian Linder, analysed the overrepresentation of men in tech startups.

Data for the study was collected through three key main data sources. These included Crunchbase, company websites and public company data. In undertaking the study, the researchers also identified 107 start-up teams.

Data revealed that a current lack of female founders in IT-driven startups is due to a perception that these types of companies are founded by someone that is young, white, and male.

This mindset is playing a huge role in tech driven startups as their business models are seen to have more uncertainties than those in other industries. This means that investors look for ways to compensate for the uncertainty by choosing to invest in startups that follow the perceived founder type.

Male founders are seen to be less uncertain than their female counterparts because they fit into this stereotype of not only tech startup founders, but founders of any startup.

Sperber, who works in the Department of Strategy and Innovation at WU, commented: “Even though the “distinctiveness” of female founders is important for investors, it does not play a crucial role.

“While female founders need to be as different as possible in order to stand out from the competition, the study suggests that being female already deviates too much from the normative standard.”

She added: “As a result, female founders are not able to prove themselves in the first place because they are simply denied the chance, or the investors’ funding, to do so, regardless of their education or experience.”

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The study also found that education or support programs for women – something that politicians, associations and institutions have been promoting for a long time – are not the solution.

Researchers suggested that this is because the basic problem does not lie in education and training but can be traced back to female founders deviating too much from the stereotype.

Instead, the researchers suggested identifying niche markets in which women are not or less underrepresented, and working to establish an alternative stereotype, which filters into the tech sector.

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