Why Women Entrepreneurs Can Do More With Less
There's no doubt that women entrepreneurs often struggle with less access to funding for startups. Venture capitalists and other investors might want to pay a bit more attention to female startup owners, though. Not only are they just as capable, but they are also able to do more with less.
Women need half as much.
Perhaps one of the most interesting of studies out this year on female entrepreneurship and breaking through glass ceilings is a recent survey called the Global Entrepreneurship Monitor. The survey involved 5,944 people between the ages of 18 and 74 who lived in the United States. The study found that startups run by women, on average, took just $10,000 to get underway. What's more, most women in the survey said they needed just half of that amount and often turned to family and friends as their funding source rather than venture capitalists.
Why do women need so much less to start a business? There are many possible reasons. Some experts believe it is because women are more efficient spenders, and since they have less to start with, they use those funds more wisely from the start.
Starting businesses a bit later.
Another key component of the survey showed it was more common for women to start their businesses later in life. Men typically launch new businesses between to ages of 22 and 34. For women, that number is a decade higher -- 35 and 44.
Funding continues to be limited for women.
In some cases, this ability to use less to start a business comes directly from necessity. That's because women are less likely to obtain capital to start a business than men. Another survey, this one from the Boston Consulting Group, found that women control about $39.6 trillion of the world's wealth, but that's only 30 percent of the total.
Facts are important to note here. Women are starting businesses at a faster rate than men, but women receive only 7 percent of all venture capital funding in the country. And it's not just venture capitalists holding back. Women only receive about 5 percent of all federal contract awards. Plus, traditional banks only lend women about 5 percent of their loans.
But women have much to offer.
Aside from needing less to start a business, women have just as much ability to dominate the industries they are in. Inc.com reports that, according to the National Women's Business Council Annual Report, among successful companies, men receive six times as much funding as women. Companies that have women on their executive teams are likely to have a higher valuation at Series A - that amount tops 64 percent higher. And, women business owners typically outperform nearly all companies, except blue chips, over the long term.
There are many examples of women startup founders thriving. Unicorn startups like Houzz and SunRun, for example, have women at the helm. Women entrepreneurs such as Bhumi Bhutani, the co-founder of Way, recently raised $1.25 million for her business. Jessica Richman, the CEO and co-founder of uBiome, raised $6.5 million in funds for her business.
These are just a few examples of women who are making statements with their companies and breaking through the glass ceiling. Still, there is a lot of work to be done. Growing in importance is the need for successful women to back those trying to break through. Female leaders who are investing in female-run startups is of growing importance because not only does it open the opportunity for more funding, but it also allows for the creation of role models and mentors. Sometimes, that experience can be invaluable.
The future impact of women entrepreneurs is limitless. Women are just as capable, more likely to succeed, and can do it with less money, making them the ideal individuals to start a business. Without limits, there is no telling what women business owners can achieve.