When you think of an entrepreneur who do you think of? Mark Zuckerberg? Jeff Bezos? Elon Musk? Can you name a big-time women entrepreneur? One thing I think we can all agree on is that there seems to be a disconnect between entrepreneurship and women, or at least the representation of women in entrepreneurship. In reality, women are very present in entrepreneurship as 42% of US businesses have at least one female owner. MassChalenge found women owned businesses prove to be better investments as they outperform male lead businesses generating 10% more revenue over 5 years. And women owned businesses also are proven to have better return on investment as for every $1 invested, women generated 78 cents, while male-founded startups generated just 31 cents. The data proves women lead business are successful (often more so than male-lead), so why is the recognition and support of women still missing?
One factor explaining this is Venture Capital. Venture Capital firms fund businesses at various stages but mainly target start-up companies. Start-up's seek out Venture Capital firms to raise money and grow their companies. In 2020 AllRaise found in their annual report, 85% of venture funding went to all-male teams. Teams with at least one female founder were funded at 14%, and all female teams at just 2.3%. Not only that but funding raised for teams with female members were up to 49% less than all-male teams. Although there may be many reasons for this disparity, there is one in particular that stands out: there is a lack of women representation in VC’s firms. Women hold only 12% of US-based VC firms decision making positions and 64% of all VC firms have no women check writers.
Customarily, women are more likely to connect with other women founders and their companies, which greatly increases their opportunity for funding. Without woman at the decision-making table, female teams are already at a disadvantage, and receiving funding can be the difference between launching your company and changing the world...or not.
The reality of the lack of representation of women can be discouraging, but if businesswomen and women entrepreneurs acknowledge these areas of inequality, we can work our way towards decision-making seats and championing women entrepreneurs. Despite these points, there are many individuals and organizations leading the way to equalize the playing field for women. For example women focused accelerators, competitions, funds, and VC firms are actively seeking out women lead start-ups.
Additionally, apart from seeking funding, women entrepreneurs need to get out there and be heard! Networking is the key! Find to local or targeted programs that fit your company and get involved. Apply to accelerators, pitch competitions, and grants. Don’t be afraid to shoot your shot by sending cold emails and DM’s to the women you admire asking to connect. As they say, you get what you ask for in life, so ASK!
Lastly, remember to be the change! Support the women entrepreneurs in your own life and be a helping hand for the women around you. Women supporting women is how we change the world and make it a more equal place for not only women, but for all people and the planet.