Women-owned businesses are among the fastest-growing in the country, yet female entrepreneurs continue to face challenges.
Numerous studies point to the fact that women who run their own businesses tend to get less capital investment overall and fewer bank loans than their male counterparts.
A recent Bloomberg analysis found that just 7 percent of companies that received $20 million or more in funding between 2009 and 2015 were owned by women. Companies founded by women also get less money – an average of $77 million compared with $100 million for male-led startups, the Bloomberg report found. Meanwhile, women are paid an average of 79 cents for every $1 earned by men.
Factors contributing to a woman’s chances of success often lies in what industry they’re in and where are they based, noted Teresa Meares, who leads the National Association of Woman Business Owners. The majority of women-owned businesses are professional services, and in general such firms aren’t the best magnets for venture capital, Meares said.
“It is still very much a male-dominated world,” she said. “But it’s a fact that you’re not going to get capital invested in a company when it’s a service company, and not technology- or product-based. There’s just nothing tangible there.”
Meares said there are various studies offering estimates of just how many women-owned businesses there are in the U.S. NAWBO stats point to somewhere between 9.4 million to 10.1 million in 2015, up at least 25 percent from 2007, according to the National Women’s Business Council.
“They are the fastest-growing segment of the U.S. economy,” Meares said.
Women-owned businesses generated $1.5 trillion in sales in 2015, according to NAWBO statistics. Yet just one in five firms with revenue of $1 million or more is woman-owned. And only 4.2 percent of all women-owned firms have revenues of $1 million or more.
Geography does play a role, Meares believes. Companies based in West Coast states are more likely to be tech-related and thus more likely to attract venture capital, in addition to simply being closer to it, she said. On the flip side, companies on the East Coast or in the Midwest might have a harder time attracting capital due to the nature of those businesses and their locations.
Indeed, the Bloomberg story found that among cities with at least 20 founders, San Francisco startups had the highest ratio of women founders at 16.1 percent, while Santa Monica was second at 15 percent.
But Meares is hopeful.
“We are starting to gain some traction – those women who have made it into the larger side of owning a company, such as Tory Burch, are starting to offer programs for women who develop a product to learn, compete and get funding,” she said. “It’s a different route from the traditional ways of getting funding.”
A growing number of large U.S. companies are working to support female entrepreneurship. Trisa Thompson, senior vice president and chief responsibility officer at Dell Technologies, recently introduced a panel on women entrepreneurship at the 17th annual Texas Conference for Women held in downtown Austin earlier this month. Supporting female entrepreneurs is nothing new for tech titan Dell, which founded its Women’s Entrepreneur Network eight years ago and is a sponsor of the Texas Women’s Conference.
“Our executives realized there was no one spearheading women entrepreneurs,” Thompson said. “There just wasn’t much out there. So we wanted to change that.”
Thompson points to the above statistics indicating that just 7 percent of venture capital funding goes to women and that 7 percent of media stories are about women. “Yet women are starting businesses at twice the rate of men,” she said. “But they’re also failing faster.”
Part of Dell’s mission is to help educate female entrepreneurs about funding opportunities, enabling technologies and taking advantage of resources from groups like the Small Business Administration. Every year, the Round Rock-based company holds a women’s entrepreneur summit in a different locale (past conferences have been held in China, Brazil, Turkey, India and South Africa).
When it comes to supportive environments for female entrepreneurs, Austin ranked relatively high – No. 12, to be precise – on the Dell Women Entrepreneur Cities Index for 2016. Dell describes the ranking as the only global gender-specific index that looks at a city’s ability to attract and foster growth of women-owned firms.
“Dell is behind efforts to support and nurture female entrepreneurs 100 percent,” Thompson said.
Meanwhile, Marian Cabanillas, president of health plan operations for United Healthcare, said the insurer sponsors the Texas Women’s Conference because the mission and values represented there align with its own.
“We see this is a very inspirational opportunity,” she said. “It not only gives us a platform to reach a lot of people and talk about what we’re doing, we’re also able to talk about how to survive and thrive in a male-dominated industry, and how to develop leadership skills.”
As the nation’s second-largest employer of nurses in the country, United Healthcare is supportive of women “rising through the ranks, and making it to leadership positions,” Cabanillas added. “If we can start empowering women to take care of themselves and stand up as leaders, that has such an impact in the long-term,” she said.