Beyond the Pitch: A qualitative study on the role of Gender in Corporate Governance within Venture Capital-Backed Startups

Sammanfattning

The present study investigates how gender influences Corporate Governance (CG) in the context of Venture Capital (VC) backed startups, through a qualitative cross-sectional study involving seven in-depth interviews with startup founders and industry experts within Sweden. Drawing on the concepts of gender homophily (Ibarra 1992; Ridgeway, 2011), the study finds that informal governance dynamics- rooted in trust and social biases- play a significant role in shaping investor-founder relationships. The findings reveal that male investors, who dominate VC firms, often demonstrate greater trust in male entrepreneurs, resulting in more favorable governance terms for male-led startups throughout their relationship with their VC. In contrast, female founders frequently encounter more restrictive governance provisions, such as heightened scrutiny through anti-dilution clauses. Furthermore, informal power imbalances limit the decision-making autonomy of female founders. Previous research has largely overlooked the role of gender in VC governance, assuming that governance practices are driven solely by financial concerns. Accordingly, the present study highlights a critical inconsistency in the treatment of gender in Corporate Governance research, emphasizing the need for a more nuanced approach that accounts for the social and psychological factors influencing governance within the VC ecosystem.