Over the last decade, new ventures across industries have made ever greater claims about their impact on society, thus framing their businesses in terms of social impact. Interestingly, we have observed that a disproportionately high number of ventures that emphasise social impact seem to be founded by women. This could be because female founders are more likely to care about social issues than men. But we also wondered if something else might be going on: Could this positive social impact framing actually have strategic benefits for new ventures and their founders?

In our forthcoming article “Gender Bias, Social Impact Framing, and Evaluation of Entrepreneurial Ventures”, published in Organization Science, we find that for female founders who have a social mission as part of their ventures, highlighting a social impact leads to more positive perceptions. In short, we find that social impact framing diminishes the discriminatory effects of gender bias.

Mitigating the gender penalty

To explore this idea, we carried out two studies. In the first, we partnered with an entrepreneurship incubator that supports businesses with a social mission to study real-life venture evaluations made by potential funders and other supporters. Because all the founders had a social mission, they had a choice about whether to emphasise their social impact in presenting their venture or not. Some devoted more than a quarter of their business plan to the venture’s social impact, while others barely mentioned it at all.

Across 43 ventures and 421 evaluations, we found that female-led ventures were perceived as less viable than male-led ventures, on average. However, female-led ventures with greater social impact framing managed to avoid this gender penalty (male-led ventures were unaffected). These patterns were the same regardless of whether evaluators were male or female.

To dig deeper, we conducted a second study in the form of an experiment. We developed two entrepreneurial pitches that described a fictional venture. Both discussed the commercial objectives of the business, but only one also emphasised the social mission. Each pitch was recorded by either a man or a woman, resulting in four versions that were evaluated by a total of 224 MBA students.

The link between social impact, warmth and gender

Consistent with our initial findings, the “commercial only” version was viewed more positively when pitched by a man, whereas evaluations of the “social + commercial” pitch were equally likely to be positive, regardless of whether it was recorded by a man or a woman. We also found that this was due to a link between social impact and the perceived personal warmth of the entrepreneur: Both male and female entrepreneurs were perceived as “warmer” when using social impact framing, but only for female entrepreneurs did this translate to a more favourable evaluation of the business.

Our findings speak to the important role of stereotypes in how entrepreneurs are evaluated. A particular image surrounds successful entrepreneurs, i.e. they are often expected to be aggressive and ambitious. This poses a challenge to women entrepreneurs, as research shows that women who project an aggressive, non-feminine persona may be viewed as more competent, but may also suffer for violating societal expectations of warmth and care. Simply put, they face a “double-bind”: What is expected of them as entrepreneurs is at odds with what many expect of them as women. Our research suggests that social impact framing might allow some women entrepreneurs to break the double-bind by avoiding discrimination while also meeting gendered expectations.

By no means a panacea

In some respects, we believe that this is great news. Many women entrepreneurs we talk to hold back from sharing their goals to impart social impact because they fear that they will not be taken as seriously, and that their business will suffer as a result. Our research suggests very much the opposite: Women entrepreneurs with social impact goals may actually benefit from talking about them freely.

On the other hand, this is also somewhat disappointing in that it confirms other recent research showing that women have to conform to gender stereotypes to be perceived as competent. The fact that this is happening is a consequence of persistent gender biases that continue to play an outsized role in venture capitalism. While this research reiterates that women are judged differently than men, the silver lining is that those in the field of social impact can use this to their advantage.

Such framing can also backfire. If it is not authentic or if it is over-used, social impact framing might be viewed with scepticism. Social impact framing may help to mitigate the effects of gender-based discrimination in the short-term, but it is unlikely to change the stereotypes that underlie discrimination, and may even reinforce them. To solve the larger issue of gender discrimination, entrepreneurs, investors and others in the entrepreneurship ecosystem will all need to continue confronting some very deeply-held biases.

Matthew Lee is an Assistant Professor of Strategy at INSEAD.

Laura Huang is an Assistant Professor of Management and Entrepreneurship at the Wharton School, University of Pennsylvania.

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