By: Sharon Hadary
For more than two decades women have started businesses at 1.5 to 2 times the rate of men. Today nearly 4 million women own high-growth businesses. Over a third of women business owners want to grow their business by five or more employees in the coming year.
High growth requires access to capital -- credit and equity. At first, many believe the success of women's start ups would give women credibility in the credit and equity markets. Research has dashed that belief!
Women-owned and led business lag similar men-owned and led businesses in obtaining both credit and equity even when their financials and business plans are as solid as those of the men. Women get less money and more rigorous terms.
For many years the onus has been on women to change to fit in with the male dominated capital markets. Women learned to speak, present, and interact like men. Success rates improved somewhat, but a substantial gap persists.
It won't go away until men join with women and become part of the solution.
This is not about social justice; it is an issue of national and international economic impact. Research continues to affirm that having women in leadership positions and on boards of . IMF Managing Director Christine Lagard estimates that increasing the participation of women in the US economy -- including entrepreneurship -- would increase gross domestic product by 5%.
How do we create change? Experience and research with successful women entrepreneurs as well as men and women investors identifies key factors.
For women:
This article was originally published in The Wall Street Journal.
For more than two decades women have started businesses at 1.5 to 2 times the rate of men. Today nearly 4 million women own high-growth businesses. Over a third of women business owners want to grow their business by five or more employees in the coming year.
High growth requires access to capital -- credit and equity. At first, many believe the success of women's start ups would give women credibility in the credit and equity markets. Research has dashed that belief!
Women-owned and led business lag similar men-owned and led businesses in obtaining both credit and equity even when their financials and business plans are as solid as those of the men. Women get less money and more rigorous terms.
For many years the onus has been on women to change to fit in with the male dominated capital markets. Women learned to speak, present, and interact like men. Success rates improved somewhat, but a substantial gap persists.
It won't go away until men join with women and become part of the solution.
This is not about social justice; it is an issue of national and international economic impact. Research continues to affirm that having women in leadership positions and on boards of . IMF Managing Director Christine Lagard estimates that increasing the participation of women in the US economy -- including entrepreneurship -- would increase gross domestic product by 5%.
How do we create change? Experience and research with successful women entrepreneurs as well as men and women investors identifies key factors.
For women:
- Believe in yourself
- Get to know the players -- both bankers and investors -- and learn to talk their language
- Explore emerging alternatives funding sources -- including the a number of women-led investment funds
- Benefit from associations focused on women with high growth businesses(e.g. Springboard; Women Presidents' Organization)
- Seek out banks and investment firms with women in decision-making positions; research shows they are more likely to invest in women-owned/led enterprises
- Review your portfolio. How many companies are led by men and how many are women-owned or have women in leadership ? Are you missing out on potentially lucrative opportunities?
- Is your level of investment in women-owned enterprises at the same level as similar firms owned by men?
- Ask yourself what characteristics you associate with successful entrepreneurial leaders. Do these expectations (such aggressiveness) unconsciously lead to evaluating women leaders as having lower potential?
- Recruit women to join your firm. Ask for their evaluation of women-owned firms. They may see opportunities where you do not.
- Become involved in the non-profit organizations that are preparing women to seek credit and equity and contribute to building a strong pipeline of women-owned and led businesses. It is good for your busines.
This article was originally published in The Wall Street Journal.
RSS Feed