Women entrepreneurs and venture capital: managing the shadow negotiation

Abstract

Purpose: The purpose of this paper is to conceptually and empirically explore issues that explain why women entrepreneurs access only a small percentage of venture capital (VC) investment in the USA.Design/methodology/approach: The focus is on the situations women entrepreneurs face, and the strategies they adopt, to successfully fund their high‐growth businesses with venture funding. Rather than looking for answers at the individual level (men v women), the authors focus on the construct of gender and the way that the socially constructed business practices and processes of access to capital may appear neutral and natural but, in fact, may deliver differential consequences to women and men. When entrepreneurs and capital providers are interacting around the terms and particulars of a business venture, they are also participating in a less obvious conversation – an interaction that is call theShadow Negotiation. Through interviews with women who have been successful or are in the process of accessing VC for their businesses, patterns of women's awareness and strategic responses that illustrate this phenomenon are identified and their implications discussed.Findings: Women are actors with agency, taking control over situations that may be stacked against them. The analysis suggests that women entrepreneurs vary in the degree to which they identify the gendered landscape they are navigating, and the level of attention and care that management of this landscape demands.Originality/value: This study complements existing research, both theoretically and prescriptively.