The proportion of women angel investors in an angel fund is related to the number of investments made by the group, according to a recently released study conducted by professors from Oregon State University and the University of New Hampshire.
Most notably, when women made up more than 10 percent of the investors in an angel fund, their presence became associated with increased investments, a result that surprised the researchers.
“It is well-documented that women are, on average, more cautious investors than men and so we expected to find that the higher the proportion of women in the angel groups, the less likely the angel group was to make an investment,” professor John Becker-Blease said in a release from Oregon State University’s College of Business.
“Contrary to our expectations, we found that only when women were in a very small minority was their presence associated with a decrease in investments.”
Becker-Blease co-authored the study with Jeff Sohl from the University of New Hampshire.
The study also found that the fewer women there are in a group, the less aggressive they are in making investments.
The study asserts that phenomenon may have something to do with gender stereotypes and something called “stereotype threat.”
“When a stereotype exists about a person, that person will behave in a manner consistent with that stereotype when they are in a situation that highlights, or accentuates, this aspect of their status, whether that is gender, race or ethnicity,” according to the study.
“When there is only a handful of women participating in these groups, their status as women, who are less aggressive investors, induces greater reluctance to invest,” Becker-Blease said, “but as the proportion of women increases, women investors are made less aware of their status, and invest with greater confidence.”
The study examined the impact that gender diversity had on the investment behavior of 183 angel groups between the years 2000 and 2006.
The results were published in the July issue of July issue of the journal Entrepreneurship, Theory andPractice.