Does Gender Matter in Entrepreneurship?
Karl R. LaPan President & CEO, The NIIC
What does it take to succeed as an entrepreneur? Even in 2017, gender can be a barrier. While it’s true that more women than ever are working outside the home, they are under-represented when it comes to business ownership. Why is this the case?
- Women face big disparities in their ability to access capital to grow their business ventures beyond solo-preneurs.
- Women lack a pool of mentors/role models to get the right advice and to be encouraged and inspired.
- Women don’t have “ready made” networks/resources providing inclusivity and high degrees of emotional support.
- Women lack confidence and have a fear of failure that holds them back from realizing their full business ownership potential.
First, women are often met with static when they seek financial and social support for their ventures. It may be a self-fulfilling prophecy. Investment firm Female Founders Fund released a report that underlines this reality. Of the more than 200 Bay Area startups that in 2015 received a financing round of between $3 million and $15 million led by an institutional investor — a mere eight percent were led by women. This was a decline of nearly 30 percent from the previous year.
Second, women may be discouraged from even considering the option of entrepreneurship in the first place, because they feel it is not obtainable. Consider it a chicken/egg problem. There are 7.8 million women-owned businesses across the United States, which is 28.7 percent of the total business establishments. More women might feel empowered to start a business if they see others out there doing the same thing and have the peer-to-peer learning and network support of their male counterparts. When you consider that women make up over 50 percent of the population, our collective goal should be to make sure this percentage is representative of the number of women-owned businesses. Why? By addressing the entrepreneurial gender gap, we could address a significant component of why our economy has been stuck in low to no growth mode. According to a Boston Consulting Group Study, if women and men participated equally as entrepreneurs, global GDP could rise by as much as 2 percent or $1.5 trillion.
So now that we’ve established that the playing field needs some leveling, a few questions arise. Can we work to overcome these misperceptions as a society? If so, how? To answer that, let’s look at a few positive steps we can take:
1) We can encourage dialogue in classrooms regarding history’s standout women entrepreneurs. Aspiring woman-owned businesses need role models and mentors. It is shameful that entrepreneur is not a career included on the PSAT career wheel. It should be.
2) We can tell the stories of women who have started, launched and grown successful high-performance Inc 5000 or Fortune 1000 companies.
3) We can support programs (financially and relationally) like our NIIC WEOC (Women’s Economic Opportunity Center) that is working to reduce the four barriers I discussed in my opening paragraph.
4) We can pay it forward – be a mentor, trusted advisor, advisory board member, an angel investor or a sounding board for women-owned businesses.
The good news is that the more we celebrate and highlight women entrepreneurs, the more our culture will change and the media as a whole will take note and (hopefully) tell their stories. Women offer a unique set of perspectives and experiences that complement and strengthens the entrepreneurial ecosystem. One way women business owners can “stand up and be counted” is by entering important national competitions like the InnovateHER Indiana.
The U.S. Small Business Administration (SBA) has announced the launch of the 2017 InnovateHER: Innovating for Women Business Challenge, a nationwide business competition to drive attention and resources to innovative products and services that make our lives easier and longer. Competitors vie for $70,000 in prize money provided by SBA for the InnovateHER competition through a gift from the Sara Blakely Foundation. For more information, visit innovateherindiana.com. The NIIC, WEOC, Brightpoint, Community Development Corporation, SCORE, and SBDC are proud local sponsors/supporters of this celebration of women inspired companies and products.