Closing the funding gap for entrepreneurs with disabilities with the help of cognitive science
Type
fundamental research project
Start Date
August 1, 2024
End Date
March 31, 2028
Keywords
entrepreneurship
disability
decision-making
biases
entrepreneurial finance
experiment
minorities
Description
Persons with disabilities have dramatically lower labour market participation rates than non-disabled people worldwide. In Switzerland, 32% of persons with disabilities aged 16 to 65 are unemployed; worldwide, the statistics are worse, 65% in the US and 50% in the EU. Entrepreneurship is a powerful economic tool against unemployment, especially for minority and marginalised groups. However, persons with disabilities face specific entry barriers to entrepreneurship and especially to high-growth entrepreneurship. In developed countries, these barriers do not appear to be part of the demand side (i.e., entrepreneurs with disabilities not applying for funding). Education levels do not significantly differ between entrepreneurs with and without disabilities, and the motivation to enter entrepreneurship is higher for entrepreneurs with a disability than for the general population (the self-employment rate of disabled people in the EU is 10% vs. 8.5% for non-disabled people). Instead, one of the most important entry barriers to entrepreneurship that disabled persons face is the lack of access to start-up capital. Despite the societal and economic importance of this topic, thus far, no study has concentrated on understanding the funding gap that people with disabilities face in entrepreneurial settings. The main goal of this project is to investigate the disability penalty in entrepreneurial financing by studying the cognitive processes of equity investors when making investment decisions about ventures led by entrepreneurs with visible disabilities. We build on expectancy violation theory, cognitive theories of attentional processes and information processing, and the stereotype content model to answer three main research questions:Are entrepreneurs with disabilities discriminated against when they seek venture finance, and to what extent?To what extent is the discrimination of entrepreneurs with disabilities attributable to investor cognitive limitations?What strategies could mitigate the potential negative effect of entrepreneur's disability on investment outcomes?We will answer these questions by performing a series of studies and experiments in the field, online, and in the laboratory. We first analyse crowdfunding projects to explore the extent of the disability funding gap in practice (WP1). In WP2, we conduct exploratory interviews with investors and entrepreneurs with visible disabilities to understand the challenges from their perspective. In this work package we also perform various multistage experiments. In WP3, we deploy an experimental design to establish causality and rule out alternative explanations for the relation between disability and lower investment rates, while in WP4, we conduct an online experiment with equity investors where we manipulate the type of visible disability of the entrepreneur and capture investors’ attentional processes with eye tracking. In WP5, we deep dive into the information processing of investors by using electroencephalograms (EEG). WP6 analyses different strategies that entrepreneurs with a disability can use to counteract the discrimination they face.We contribute to the minority literature in entrepreneurship, where we will add a much-needed cognitive lens to understand the decision-making processes of new venture investors when evaluating disabled entrepreneurs and uncover what lies behind their discrimination. We help disabled entrepreneurs understand how to best position and present their new venture to overcome the difficulties in getting financed. We will also help investors to better comprehend their own decision-making processes to reach their self-proclaimed goals of diversity and inclusivity. In addition, we will inform policymakers about the policy instruments needed to make our societies more inclusive.
Leader contributor(s)
Charlotta Siren
Member contributor(s)
Oguzhan Okumus
Amarin Muehltaler
Partner(s)
Tom Vanacker
Funder
Topic(s)
Entrepreneurship
Disability
Method(s)
analyse crowdfunding projects
exploratory interviews
experimental design
online experiment
electroencephalograms (EEG)
Range
HSG + Partners
2 results
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Item type:Publication, Heroes Within Limits: Disability Cue, Hero Narratives, and Shifting Standards in Crowdfunding(2026-10-19); ; Charlotta SirenHow do crowdfunding audiences evaluate entrepreneurs with disabilities, who can elicit both devaluation and admiration? Drawing on the shifting standards model, we argue that using a hero narrative attenuates the funding penalty these entrepreneurs face by leading backers to judge them against a lenient minimum standard, but that larger funding goals limit this benefit by shifting backers to a more demanding confirmatory standard. Using LLM-based annotations of 154,099 Kickstarter campaigns (2009–2023) and 2,134 matched pairs of campaigns with and without a disability cue, we find that a disability cue is associated with a 3.9-percentage-point lower probability of success. Stronger hero narrative increases success probability of entrepreneurs with disability, more than twice the gain for entrepreneurs without one. However, favorable evaluations of entrepreneurs with disabilities pay off only when their resource claims are modest. We offer large-scale field evidence on how entrepreneurs with disabilities are evaluated and show that the standard applied to stigmatized entrepreneurs shifts with the capability they claim through their funding goal, not with social category alone.Type:conference paper - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Poker face and steady voice: Gender and reactions to emotional neutrality in crowdfunding(2026-06); ; Charlotta SirenWhile emotional neutrality (e.g., maintaining a neutral face, speaking with a calm voice) can help entrepreneurs project a sought-after image of rationality, the effectiveness of such displays is context-dependent and gendered. In the emotionally resonant world of crowdfunding, the value of neutrality is ambiguous, as it may conflict with audience expectations of expressiveness. Building on the Emotions as Social Information (EASI) model, we argue that equivalent neutral cues from men and women are evaluated differently. Using pre-trained machine-learning algorithms to extract facial and vocal features from 548 crowdfunding videos, we examine how neutrality in pitches relates to funding success. We find that a neutral facial expression (“poker face”) is penalized for women but has no discernible effect for men. In contrast, a neutral vocal tone lowers success for both sexes; however, further analysis reveals this penalty is concentrated in male-typed categories (e.g., technology, design) and largely absent in female-typed categories (e.g., fashion, craft). Our findings highlight that crowdfunding backers interpret emotional neutrality through the combined lens of gender and pitch context, which may create biases in entrepreneurial evaluation.Type:journal articleJournal:Journal of Business Venturing InsightsVolume:25