| So in this particular case, assuming that First Round's sample size is significant, it may just be that the female founders who seek them out are just on average better than the male ones? I suppose that if women think that the selection process is biased against them, and most do (and it may be) perhaps the less than excellent ones just don't apply, whereas that isn't true for males? First, the sample size not significant. Adding back one data point, Uber, which was a real data point that was intentionally removed, likely reverses the effect. But imagine we had real sample of thousands of companies, and it did show the result. A typical scenario is that different demographics might connect with First Round via different deal flow channels. For instance, one channel might be longstanding personal connections, another channel might be outreach to companies in the news. Now imagine female founders are much more likely to be found via outreach rather than personal connections. Perhaps this is due to a negative personal bias -- the VC's are less likely to be chummy with females because of their sex. So they only find female founders when their company is in the news. It is typical in all businesses that different deal-flow channels have different average returns. So: * If both channels perform equally well, no bias will be seen in the statistics, even though the VC's are in fact biased. * If the outbound channel generally performs worse, then women founders in the sample will perform worse than average, even though the VC's are actively biased against them (they are ignoring all the women who would have done well, if only that had personally known them. Sine the VC's never invest in them, their results are not measured). This is the opposite of the statistical relationship that PG claims should exist. * If the outbound channel generally performs better, then women in the sample will be better than the average. I should also add that the differences in the channels might be due to a positive bias on the part of the VC -- perhaps they do more aggressive outbound outreach in order to get more female founders in the pipeline. Or the difference might be due to something completely neutral. The lesson here is that using statistics is a perilous endeavor. If you want to detect something like bias, you cannot use numbers alone, you need to combine any numbers with a deeper understanding of the selection process. There is no way that a third party can run a simple correlation and determine with any degree of certainty that the field is in fact biased or not. |