Business consultants today advice women to act like men when they apply for business resources, but does it really work? Our historical study follows men and women as they applied for business resources and the resource providers who responded to their applications, as in the following examples:

“For over a month the bank refuses to transfer my loan. Was the [Jewish] agency’s approval based on a lie? I urgently ask you once more that you instruct that my loan be granted forthwith.” (a woman’s application for a business loan)

“The French president receives 200 letters daily and answers them immediately, and you sir, mayor of Tel Aviv, do not answer my numerous letters …I ask that you notify us forthwith on the matter of license, or I shall make this injustice a public affair. “ (a man’s application for business license)

While the assertive rhetoric is similar in both applications, it is very likely that while the man’s request was positively answered, the woman’s application was denied. Does this mean that gender affects men and women’s chances to raise business resources?  If so, how? Are women entrepreneurs more successful when framing their application for resources in a feminine or masculine voice? What if some men adopt a feminine voice when applying for resources?

History is an insightful source for understanding gender and venture capital

The lasting gender inequality in business resource-acquisition, and the lack of sufficient explanation for this reality, sent the three of us back in time to 1930s and 1940s pre-state Israel, then under British rule, in pursuit of answers. We analyzed loan and business-license applications by men and women business owners, that we retrieved from the archives of the Jewish Agency and the Tel Aviv City Council.

The period of our study marks the nascent formation of a significant urban, private-enterprise oriented middle class in pre-state Israel. The Jewish Agency was entrusted by the British government to run the Jewish community’s civil and economic affairs. The Agency prioritized economic development to establish claims for sovereignty in future resolutions involving the Jewish and Arab communities, and to address the acute existential needs of the waves of Jewish immigrants fleeing Europe. In the absence of a well-developed financial sector, the Jewish Agency, in cooperation with local banks, established business loan funds to cater for the growing need for venture capital and was the dominant provider of venture capital. Equally, Tel Aviv, was the largest city and business center.

Business loan and license applications were, in this context, formulated as non-standardized request letters, in which applicants detailed not only professional experience and financial ability but also any additional information that they deemed relevant, such as life circumstances, political affiliation, civic activity, and personal convictions.

Negotiations for business resources are not gender neutral

We found that men and women applicants differed in the arguments they raised to justify their claim for resources and in the way they presented themselves. Most women justified their requests based on dire familial circumstances, be it widowhood, spousal desertion, or a child’s illness. Writing their applications, they exhibited emotional distress and weakness, and pleaded for community leaders’ sense of responsibility for women and children, a norm well established in Jewish history. In fact, these women based their applications on local gender conventions concerning women’s role as mothers and wives. They stressed home and family as viable elements of a business case and referred to their vulnerability not as a liability but as a rational ground for claim-making. Thus, they bridged the gap between their gender and the business world.   

Men too, followed gender conventions of their construction as competent individuals fitted to economic activity. Accordingly, unlike most women, men were inclined to root their resource claiming in two sets of argument. Some men wrote in an impartial, instrumental approach and specified business-related information such as equity, estimated costs, and expected revenues. Other men wrote assertively, stressing their civic contribution to the community through Zionist activity, military service or pioneering industrial endeavor that advanced the national economy.

Curious as to the results of these disparate argumentation strategies, we also retrieved officials’ correspondence and final decisions to many of these business resource applications. We found that men’s applications were judged instrumentally, that is, according to whether or not their claims were economically viable or contributing to the local economy. At times, a representative would express personal empathy for a man’s predicament, looking for ways to circumvent bureaucratic hindrances. Women’s applications were treated based on whether or not their rhetoric conformed to gender norms. Women who succumbed to feminine depictions and pleaded for help based on their weakness and need, were treated more favorably than women who employed an assertive position similar to that taken by many men. The latter were generally refused resources. Similarly, requests by some men who pleaded, as opposed to making assertions, were ignored.

Insights for a gender aware resource allocation process

Our findings offer practical insights beyond our historical case study that may be relevant to practitioners in public and private institutions involved in the allocation of venture capital. First, gender plays an implicit, but significant role in shaping both the construction of application for resources and their evaluation by resource holders. Sensitizing policy makers and resource providers to underlying gender assumptions concerning values and practices can raise awareness to gendered expectations shaping negotiation interactions. Specifically, woman may feel compelled to self-restrict their claims to gender appropriated arguments, thereby reproducing their marginalization. This can help design a more effective, gender-conscious process of resources allocation.

Second, gender norms are context specific, meaning that gender norm conventions may vary across locations. As the promotion of women’s entrepreneurship is considered an important vehicle to the elimination of global poverty, this cultural variation should be considered when formulating policies for the promotion of entrepreneurship globally.  

Read the full study here: https://onlinelibrary.wiley.com/doi/10.1111/joms.12691  

Key words: Gender, Entrepreneurship, Business resources