A recent study published by the Democratic staffers of the Senate Small Business & Entrepreneurship Committee details how difficult it is for women to get funding for their startups. While women own 30 percent of all small businesses, they only get $1 out of every $23 loaned.
The story is about the same in the venture capital world. I remember pitching a startup once at a venture capital event where I was the only woman. I didn’t get the money and I recall the organizer saying, “We were hoping she was good looking.”
Academic studies have been conducted in which men and women give the same presentation to investors. Overwhelmingly, the men presenters garner much more support for their “projects” than the women presenters. I hope this research continues through the years because I’d like to see if it changes and if so, how quickly.
However, I’m going to leave the complaining – or at least most of it – to others and point out some very encouraging information that is hiding behind all these statistics.
Beyond the negative
The headline on one prominent website said this: “Rejected and dejected – women small business owners still struggle to get loans from banks.” Statistically speaking, I think the use of the word “rejected” in that headline is justified. However, I think the word “dejected” isn’t.
In an earlier post, I pointed out that between 1997 and 2014, women-owned business rose by 68 percent – twice the growth rate posted by men. Add to that the number I quoted above: 30 percent of all small businesses are owned by women.
This incredible rate of growth among women entrepreneurs is happening despite the lack of funding from traditional sources. That is nothing short of phenomenal. (Hey men: If we took away your funding, could you achieve that kind of growth? Just asking…)
I believe this is testimony to women’s natural persistence, capacity to accomplish much when given very little, and ability discover and exploit alternative strategies – that would be called “thinking outside the box” in today’s vernacular. By the way, when I reflect on these traits, it seems to me they are also found in great moms. It turns out that what makes women wonderful at raising families and running a household, also makes them talented and tenacious business owners.
There is some data missing from the studies that have been conducted on women and business financing. I would like to know what women are doing in lieu of receiving traditional bank loans and venture capital. Perhaps many are finding ways to bootstrap their businesses without going deeply in debt or giving up a big percentage of ownership. Those would be very positive developments and competitively position women-owned businesses very well.
So folks, keep pushing for equality in funding for women, but at the same time take pride in what our women entrepreneurs have been able to accomplish against great odds.