The balance of business power is beginning to change hands in many parts of our world. Women are making significant strides. Not so long ago, women did not go to college. Now, for every two men who graduate college, three women do. Women are now the majority in the workforce. This is especially true in the legal, medical and financial sectors. In the dozen or so business sectors that are projected to grow the most in the coming years, all but two are dominated by women.
Early in the start-up process, women take fewer steps to position themselves to start high-growth businesses.
– The Kauffman Foundation
Of course, this is not the first time that women have made such notable progress. This also happened in the 20’s and in the 60’s but then it was fueled by feminists who were imprinting their own passion onto the movements. In this revolution, the passion is muted. The difference is that the economy has changed a great deal.
Where we once had a largely manufacturing economy, now we have a service and an information and a creative economy. This shift requires very different skills; skills that women have been much better at adapting. Key skills include intelligence, the ability to sit still and concentrate, to listen and communicate openly and to be flexible as business and its requirements move and change. To be a manager in these environments, you need to foster creativity, build teams, get people to talk with each other and to be creative, all pretty much second nature to women. That’s the good news.
On the other hand, although there are more female than male managers today, they are still not making it to the top of their professions. Sheryl Sandberg, COO of Facebook, enumerated the paltry percentage of female heads of state, members of parliament, C-level jobs, board seats and the numbers haven’t improved significantly since 2002.
Then, there are the women who own businesses or have a great idea for a business they want to start. There are a few things we know:
- The annual earnings of self-employed women are about 55 cents on the dollars compared to self-employed men’s earnings.
- Although women own 30% of privately held businesses, they account for only 11% of sales and 13% of employment among privately held companies.
- Women start with less capital and are less likely to take on additional debt to expand their businesses. The source of their early money is often savings and loans from family and friends.
Men control the majority of the assets. When it comes to funding start up businesses, venture capitalist John Doerr publicly stated that his most successful investments – and the no-brainer pattern for future investments – were in founders who were white, male, under 30, nerds, with no social life who dropped out of Harvard or Stanford. Sharon Vosmek of the venture accelerator Astia doesn’t think that VCs have an overt bias against women. Instead, it’s the way the venture-capital industry operates. Vosmek says that these “systematic or hidden biases” include that VCs hold clear stereotypes of successful CEOs. They call it pattern recognition, but in other industries they call it profiling or stereotyping.
The growth of women-owned businesses, both high and low-tech, and their performance as job creators at a time when other businesses are reducing headcount, testifies to the importance of women-owned businesses to the economy. These businesses represent a potential source of future economic growth. These businesses deserve to be recognized, encouraged, mentored and funded on a level equal to those founded and owned by men.
Incorporating feminine values into the business world is a way of doing business that is more sustainable. Risk awareness; straight-talk in simple language and telling the bad news with the good; seeking profit in a principled fashion with a wider definition of profits that encompasses positive social and environmental benefits.
Female trends and female opportunities will create the most interesting investment opportunities in the years to come. Women in the mix add diversity and different values, both with a positive impact on the bottom line. They deserve to be recognized, encouraged, mentored and funded.
The entrepreneurial ecosystem has provided significant support for all kinds of entrepreneurs. Our goal is to ensure more women come out of the ecosystem with viable, successful and sustainable businesses. We want to be clear that our focus is on scalable businesses. There are more support systems for the traditional women-owned businesses that typically do not scale than those that have potential scalability. It has been much more difficult for women to access the appropriate resources for enterprises with significant scale potential.
It is clear to us that women-owned businesses will continue to create compelling investment opportunities. We have not seen a clear path for these women to receive the support and resources necessary to create wildly successful businesses and Strategiz can be the catalyst to ensure they have the resources they need to do just that.
For further reading on this subject, see Growing the Economy by the Kauffman Foundation