No Access

STILL A MAN'S WORLD? SECOND GENERATION GENDER BIAS IN EXTERNAL EQUITY TERM SHEET NEGOTIATIONS

ETHNÉ SWARTZ

Fairleigh Dickinson University, 285 Madison Avenue, Madison, NJ, USA 07940, USA

E-mail Address: swartz@fdu.edu

Search for more papers by this author

FRANCES M. AMATUCCI

Slippery Rock University of Pennsylvania, Slippery Rock, Pennsylvania, USA 16057, USA

Search for more papers by this author

, and

SUSAN COLEMAN

University of Hartford, 200 Bloomfield Avenue, West Hartford, CT, USA 06117, USA

Search for more papers by this author

https://doi.org/10.1142/S1084946716500151Cited by:6 (Source: Crossref)

Abstract

Women increasingly start and lead growth ventures yet receive a small proportion of external equity funding. Term sheet negotiation is a pivotal moment for obtaining growth capital. We employ a multi-method, mixed mode research design to explore strategies of women entrepreneurs who have negotiated term sheets and discuss our quantitative findings. Results indicate that women entrepreneurs in our sample worked hard to achieve optimal outcomes yet come up short because of exogenous and endogenous factors linked to second generation gender bias in the negotiation process. Propositions for future research are generated given the results of this exploratory research.

Keywords:

References

Amatucci, FM and JE Sohl [2004] Women entrepreneurs securing business angel financing: Tales from the field. Venture Capital, 6 (2/3), 181–96. Crossref, Google Scholar
Amatucci, FM and E Swartz [2011] Through a fractured lens: Women entrepreneurs and the private equity negotiation process. Journal of Developmental Entrepreneurship, 16 (3), 1–18. Link, Google Scholar
Amatucci, FM, E Swartz and S Coleman [2008] Testing the ‘women don't ask' hypothesis: A qualitative study of contract negotiation in the private equity investment process. Proceedings of the International Council of Small Business Conference. Halifax, Canada, June 2008. Google Scholar
Babcock, L and S Laschever [2008] Ask for It: How Women Can Use The Power of Negotiation to Get What They Really Want. New York: Bantam. Google Scholar
Babcock, L and S Laschever [2003] Women Don't Ask: Negotiation and the Gender Divide. Princeton, NJ: Princeton University Press. Crossref, Google Scholar
Bowles, HR [2013] Psychological perspectives on gender in negotiation. In The SAGE Handbook of Gender and Psychology, MK Ryan and NR Branscombe (eds.). London: Sage Publications. Crossref, Google Scholar
Bowles, HR, L Babcock and K McGinn [2005] Constraints and triggers: Situational mechanics of gender in negotiation. Journal of Personality and Social Psychology, 6, 951–65. Crossref, Google Scholar
Bowles, HR and F Flynn [2010] Gender and persistence in negotiation: A dyadic perspective. Academy of Management Journal, 53 (4), 769–87. Crossref, Google Scholar
Bowles, HR and L Kray (2013). Negotiation is a man's game: Ultimate truth or enduring myth? Paper presented at the Gender and Work Research Symposium, Harvard Business School. [www.hbs.edu/faculty/conferences/2013-w50-research-symposium/Documents/bowles_kray.pdf]. Google Scholar
Brooks, AW and ME Schweitzer [2011] Can nervous Nelly negotiate? How anxiety causes negotiators to make low first offers, exit early and earn less profit. Organizational Behavior and Human Decision Processes, 115, 43–54. Crossref, Google Scholar
Brush, C, NM Carter, E Gatewood, PG Greene and MM Hart [2004] Clearing the Hurdles: Women Building High-Growth Businesses. New York: Prentice Hall. Google Scholar
Brush, CG, LF Edelman and TS Manolova [2012] Ready for funding? Entrepreneurial ventures and the pursuit of angel financing. Venture Capital, 14 (2/3), 111–29. Crossref, Google Scholar
Brush, CG, PG Greene, L Balachandra and AE Davis [2014] Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital. Arthur M. Blank Center for Entrepreneurship, Babson College. Google Scholar
Carli, LL [1990] Gender, language and influence. Journal of Personality and Social Psychology, 59, 941–95. Crossref, Google Scholar
Chen, H and Q Chen [2012] The mechanism of gender difference and representation role in negotiation. Public Personnel Management, 41 (5), 91–103. Crossref, Google Scholar
Coleman, S and A Robb [2009] A comparison of new firm financing by gender: Evidence from the Kauffman Firm Survey data. Small Business Economics, 33 (4), 397–411. Crossref, Google Scholar
Constantinidis, C, A Cornet and A Asandei [2006] Financing of women-owned ventures: The impact of gender and other owner- and firm-related variables. Venture Capital, 8 (2), 133–57. Crossref, Google Scholar
Eriksson, KH and A Sandberg [2012] Gender differences in initiation of negotiation: Does the gender of the negotiation counterpart matter?, Negotiation Journal, 30 (4), 407–28. Crossref, Google Scholar
Fried, V and R Hisrich [1994] Towards a model of venture capital investment decision making. Financial Management, 23 (3), 28–37. Crossref, Google Scholar
Gartner, WB and S Birley [2002] Introduction to the special issue on qualitative methods in entrepreneurship research. Journal of Business Venturing, 17 (5), 387–96. Crossref, Google Scholar
Halpern, JJ and JM Parks [1996] Vive la difference: Differences between males and females in process and outcomes in a low-conflict negotiation. The International Journal of Conflict Management, 7 (1), 45–70. Crossref, Google Scholar
Harrison, RT, MR Dibben and CM Mason [1997] The role of trust in informal investor's investment decision: An exploratory analysis. Entrepreneurship Theory and Practice, 21 (4), 63–81. Crossref, Google Scholar
Heuven, J and A Groen [2012] The role of social networks in financing technology-based ventures: An empirical exploration. Venture Capital, 14 (2/3), 131–49. Crossref, Google Scholar
Ibarra, H, R Ely and D Kolb [2013] Women rising: The unseen barriers. Harvard Business Review, September, 61–66. Google Scholar
Kelly, P and M Hay [2003] Business angel contracts: The influence of context. Venture Capital, 5 (4), 287–312. Crossref, Google Scholar
Kolb, D and K McGinn [2009] Beyond gender and negotiation to gendered negotiations. Negotiation and Conflict Management Research, 2 (1), 1–16. Crossref, Google Scholar
Kolb, DM and J Williams [2003] Everyday Negotiation: Navigating the Hidden Agendas in Bargaining. Hoboken: Jossey-Bass. Google Scholar
Kolb, DM and J Williams [2000] The Shadow Negotiation: How Women Can Master the Hidden Agendas that Determine Bargaining Success. New York: Simon and Schuster. Google Scholar
Landstrom, H, S Manigart, C Mason and HJ Sapienza [1998] Contracts between entrepreneurs and investors: Terms and negotiation processes. In Frontiers of Entrepreneurship Research, PD Reynolds, WB Bygrave, NM Carter, S Manigart, CM Mason, GD Meyer and KG Shaver (eds.), pp. 571–585. Babson Park, MA: Babson College. Google Scholar
Mason, CM and RT Harrison [2002] Barriers to investment in the informal venture capital sector. Entrepreneurship and Regional Development, 14, 271–87. Crossref, Google Scholar
Mason, CM and RT Harrison [1996] Informal venture capital: A study of the investment process, the post-investment experience and investment performance. Entrepreneurship and Regional Development, 8, 105–125. Crossref, Google Scholar
Mitteness, CR, MS Baucus and R Sudek [2012] Horse vs. jockey? How stage of funding process and industry experience affect the evaluations of angel investors. Venture Capital, 14 (4), 241–267. Crossref, Google Scholar
Neergaard, H and JP Ulhoi [2007] Handbook of Qualitative Research Methods in Entrepreneurship. Northampton, MA: Edward Elgar. Crossref, Google Scholar
Nelson, T, S Maxfield and D Kolb [2009] Women entrepreneurs and venture capital: Managing the shadow negotiation. International Journal of Gender and Entrepreneurship, 1 (1), 57–76. Crossref, Google Scholar
Parhankangas, A and H Landström (2003). Venture capitalists and psychological contract violations: An institutional approach. Academy of Management Meeting, Seattle, USA. Google Scholar
Paul, S, G Whittam and J Wyper [2007] Towards a model of the business angel investment process. Venture Capital, 9 (2), 107–125. Crossref, Google Scholar
Riding, AL, JJ Madill and GH Haines [2007] Investment decision making by business angels., In Handbook of Research on Venture Capital, H Landström (ed.). Cheltenham, UK: Edward Elgar. Crossref, Google Scholar
Riley, H and KL McGinn (2002, September). When does gender matter in negotiation? Faculty Research Working Papers Series #RWP02–036, John F. Kennedy School of Government, Harvard University. Google Scholar
Shepherd, DA and A Zacharakis [2001] The venture capitalist-entrepreneur relationship: Control, trust and confidence in cooperative behaviour. Venture Capital, 3 (2), 129–50. Crossref, Google Scholar
Small, DA, L Babcock, M Gelfand and H Gettman [2007] Who goes to the bargaining table? The influence of gender and framing on the initiation of negotiation. Journal of Personality and Social Psychology, 93 (4), 600–13. Crossref, Google Scholar
Stuhlmacher, AF and AE Walters [1999] Gender differences in negotiation outcome: A meta-analysis. Personnel Psychology, 52, 653–77. Crossref, Google Scholar
Tinkler, JE, MC Ku, KB Whittington and AR Davies (2015). Gender and venture capital decision-making: The effects of technical background and social capital on entrepreneurial evaluations. Social Science Research. Forthcoming. [gender.stanford.edu/sites/default/files/vc_gender_clayman1113.pdf]. Google Scholar
Tyebjee, TT and AV Bruno [1984] A model of venture capital investment activity. Management Science, 30 (9), 1051–66. Crossref, Google Scholar