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Women Owned Businesses: 4 Stats To Know Women tend to take lesser risks, and are happier building businesses that are more people driven and are less likely to scale up.

By Vinil Ramdev

Opinions expressed by Entrepreneur contributors are their own.

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2015 was a big year for entrepreneurs. $58.8 billion flowed from Venture Capital funds to startups and over $1 trillion in lending to small businesses from banks and private lending platforms.

Despite this flow of capital, one key group claims to remain at a severe disadvantage when it comes to securing funding. That key group is women-owned businesses.

To learn about the state of financing for women-owned ventures, I spoke with Vonda White, serial entrepreneur and founder of Camp Pillsbury, a Minnesota-based boarding school that White acquired after overcoming all the hurdles associated with securing business funding.

In 2012, White had an entrepreneurial vision and decided to open her own boarding school. After some analysis, she settled on an old college campus in Minnesota and set out to secure funding for the property and business. She was turned down from multiple banks before receiving the financing she needed: $2.5 million. White actually was able to secure the loan with no money down, an impressive accomplishment.

The challenges she faced while pursuing funding are challenges that women across the country are facing. "There are lots of articles talking about how women-owned businesses are on the rise and while that's true," says White. "There is a lot of data that shows it's still far more challenging for women than men"

Growing But Still Minority

According to a census in 2014, women owned 7.8 million businesses across the United States. While this seems high and is certainly growing year over year, it makes up only 28.7% of businesses. White says, "When you consider that women make up over 50% of the population, this number still has lots of room to improve if we want to consider all things equal".census in 2014, women owned 7.8 million businesses across the United States. While this seems high and is certainly growing year over year, it makes up only 28.7% of businesses. White says, "When you consider that women make up over 50% of the population, this number still has lots of room to improve if we want to consider all things equal".

Funding Inequality

Inequality in the business place has garnered high level of attention in recent years from Washington, D.C. to Wall Street and Silicon Valley. Despite growing public awareness, data shows that of the total companies that received funding last year, only 4% were owned by women. "It's fantastic to see the topic of inequality in entrepreneurship enter the mainstream but now we need to see action as result of this awareness," says White. "It's not just fair to blame the investors, of course. Women need to get out there, take risks, and launch their ventures."

Small Business Contracting

Government grants are a major source of funding for small businesses, estimated to be worth over $90.7 billion per year. Despite this, a tiny fraction of this money flows to women-owned ventures. It was reported that just 5%, totaling 4.6 billion, went to women-owned companies. White says, "I encourage women to pursue entrepreneurial endeavors. The path will get smoother as more people venture into the system. I am confident that the system can be made equal and I want to be a part of that solution."

Higher Risk?

While women are frequently at a disadvantage, it is not necessarily because of lender prejudice. Data shows that women-owned businesses generate on average 15% less revenue and have 21% higher operating expenses. White says, "Women-owned businesses do not make less money because they are women-owned. Instead it is because the businesses that women frequently choose to create are the ones that they are encouraged to create, which are frequently smaller and less profitable. I want women to make their own choices and to break the mold of what it means to be a woman in business today."

Conclusion

Vonda White does not believe that there is prejudice against women in entrepreneurship. In her opinion, women tend to take lesser risks, and are happier building businesses that are more people driven and are less likely to scale up.

Vinil Ramdev

Entrepreneur and Business Writer

Vinil Ramdev is an entrepreneur, business writer and marketer. He graduated with a Bachelors degree in Marketing in 2004. Since then, Vinil has been involved in starting and growing several businesses predominantly in retail, marketing, media, advertising and on the internet. His skill for seeing the big picture, and identifying trends and patterns have made him a sort-after consultant for companies who want to grow their business and make their products more discoverable. 

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