Women are starting new firms at twice the rate of all other businesses and they employ 35% more people than all the Fortune 500 companies combined. According to a Whitepaper by Illuminate Ventures ”women-owned or led firms are the fastest growing sector of new venture creation in the U.S., growing at five times the rate of all new firms between 1997 and 2006 – now representing nearly 50% of all privately held businesses; organizations that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers – and research shows gender diversity to be particularly valuable where innovation is key; however, $1M+ woman led companies are twice as likely as those led by men to gain debt versus equity capital. In 2008 woman co-founded tech businesses gained less than 10% of venture investment in the high-tech sector while representing 30% of the workforce…”
What seems to be the problem? Why investors aren’t jumping on women-led new ventures?
There seem to be a couple of important issues that penalize women entrepreneurs: one is access to the right connections for mentoring and financing and the other one is attitude.
Because early-stage investing is high-risk, many investors want to know and feel comfortable with the founders they’re backing. Women are less likely to be connected to the “right” people because they are entering the market late with respect to their male counterparts. They also have a harder time finding mentors: only 10% of columns in national newspapers are written by women, few women are in boardrooms around the country, additionally, women represent just over 15 percent of angel investors, but just 5%-7% of partner-level high-tech venture capital investors in the U.S. This is a big issue since in the male-dominated VC world there is a perception that you need to give up your personal life in order to build a VC worthy company.
This may change as more women entreprenerrus become successful and start investimng themselves. In fact, firms with women investment partners are 70 percent more likely to lead an investment in a woman entrepreneur than those with only male partners.
As per attitude, there still are big differences in how men and women carry themselves. A recent article on Business News Daily highlights how much women are still coy about their achievents, they still attribute their successes to chance, luck or “nothing really” minimizing their importance. Even the posture and the words chosen sometimes reflect lack of assertiveness, or too much aggressiveness without really getting to the point across. Men seem to be more secure about their accomplishments or lack thereof and they seem to take criticism less personally than women in some instances.
And in Italy?
I would like to hear from women entrepreneurs both in Italy and the US regarding the opportunities and obstacles they might have found when trying to finance their copmanies activities through VC’s or angels, banks or other sources.