This severe lack of funding poses a substantial threat to the growth, expansion, and overall profitability of women-led businesses.

Understanding gender role congruity

Lakshmi Balachandra’s research found that only 15% of companies receiving venture capital investment have a woman on their executive team, and less than 3% have a female CEO. It is often assumed that women entrepreneurs face discrimination simply for their gender. However, research shows they are penalised for exhibiting stereotypically feminine traits.

This is explained by gender role congruity theory, which claims that prejudice toward female leaders occurs because there are inconsistencies between the characteristics associated with the gender stereotypes and those associated with typical leadership. Women are criticised for displaying masculine traits such as being too ambitious, aggressive, and cold. Simultaneously, they are judged for showing feminine traits, which are perceived as misaligned with the demands of entrepreneurship.

There is no one-size-fits-all solution, but basic rules of verbal and non-verbal communication can be applied. Let's explore what can be done.

Mirroring investor energy

One common misconception is that when pitching to investors, one should display passion and determination. While these qualities are important, research shows that investors tend to favor founders who can demonstrate a calm demeanor. In turbulent times, those who can stay composed are seen as more likely to lead their team and business to a better future.

The rule of thumb for female founders is to research the investor's profile in advance to match their energy. Vanessa van Edwards recommends mirroring your counterpart's energy as much as possible without being too forced – this is how you can convey trust.

Authentic voice matters

If you watched the TV show ‘The Dropout’, you probably remember the scene where Amanda Seyfried, portraying the CEO and founder of Theranos Elizabeth Holmes, was practicing a lower voice to appear more confident and trustworthy in front of investors. It is a widely known fact that a lower pitch is considered more trustworthy. However, research by Christoph Schild proved that a lower fundamental frequency, perceived as a lower pitch, is judged as more trustworthy for men but not for women in economic domains.

This means that if you feel insecure about your voice, you should probably work on your public speaking skills but don’t try to artificially assign yourself a voice that feels inauthentic to you. In the end, it’s more important to convey confidence to overcome the gender gap.

The Power of abstract language

Another communication trait that female founders should pay attention to is that people tend to associate abstract language with power and leadership. In general, men tend to speak more abstractly than women, according to this study. Using abstract language is perceived as more managerial, whereas using concrete language is seen as more task-oriented.

Of course, there are situations where concrete language is necessary. However, when raising funds and communicating with investors, prepare your speeches and pitches carefully. Think about what details need to be included and which can be left out. Look for opportunities to replace tangible verbs with less-tangible adjectives and find ways to incorporate more abstract language that goes beyond the facts toward your larger purpose and vision.

Leveraging appearance

Our choice of clothing, hairstyle, and other appearance elements are also means of nonverbal communication. Female leaders might think that their attractiveness could work against them by conveying the wrong priorities. However, this research proves this is not true. The study found that a woman entrepreneur’s attractiveness positively influenced male investors' assessments of her competence. This positive assessment led to a higher likelihood that her business proposal would progress through the investment screening stage. Additionally, male investors experienced increased cortisol levels when presented with an attractive woman entrepreneur. This physiological response further contributed to positive evaluations of the entrepreneur's proposal.

Balancing communal and personal language

Another interesting trait observed in this research is that women tend to use ‘we’ when referring to achievements for which they are individually and personally responsible. Men are more likely than women to use ‘I’ when discussing achievements for which they are not individually and personally responsible.

While using ‘we’ may seem like a good idea when talking to investors or pitching in front of them since it demonstrates team effort, investors are looking for the one  who can lead the team in turbulent times. It's important to convey confidence and differentiate team results from your personal achievements .

Applying these tailored communication strategies can significantly enhance the success of female-led startups in securing investment.