What Does A Female Entrepreneur Look Like? (Blog Post)
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Abstract
A survey-based blog post detailing the trends and tribulations of women in entrepreneurship today.
Blog Post
- When powerful businesswomen like Tory Burch boldly state that female entrepreneurs are "crucial to economic growth around the world" in sources like The Economist, people tend to listen. The rise of women in entrepreneurship has been lauded as an "economic tailwind that will give a boost to twenty-first-century growth" by the Kauffman Foudnation and has largely been supported as a major potential boost to the United States' and global economies. With all of this excitement surrounding the role of women in entrepreneurship, what do women who were founding CEOs, presidents, chief technology officers, or leading technologists of tech startups founded between 2002 and 2012 look like?
- In a survey of 350 individuals fitting the above description conducted by the Kauffman Foundation and Stanford University, some interesting results were uncovered. For starters, women entrepreneurs are highly educated with 56% having graduate degrees, and 38% percent having bachelor’s degrees. Compared with 33% of the total female population possessing a bachelor’s degree and only 12% possessing a graduate degree, female entrepreneurs represent a highly educated slice.
- They've also had an early start, with 40% of female entrepreneurs reporting that they started their first company before the age of 30, and 73% reporting having started their first company by age 40. Their training centers around business, the liberal arts and computer science/IT/engineering, with 27%, 20%, and 18% of respondents reporting that their field of study was in one of those areas respectively. 86% of female entrepreneurs wanted to "capitalize on a business idea they had," 72% had "always wanted to own their own company," and 68% wanted to "build wealth."
- With impressive educational backgrounds, early-onset determinism, and powerful motivations for founding it is no surprise that female entrepreneurs on average perform 9% better on the Kauffman Opportunity Entrepreneurship Share than men, indicating that they are better at identifying the market "gaps" where entrepreneurs thrive. Furthermore, women start their equally successful companies with 50% less capital than their male counterparts, according to the National Women’s Business Council.
- The question remains however, why is there such a disparity between the trends of women in entrepreneurship as opposed to the trends in entrepreneurship as a whole? Female-owned businesses only represent 16% of employing firms, usually with employee counts in the single digits. Moreover, among high-growth firms, women represent a mere 10% of founders. Returning to the Kauffman Foundation survey, 77% of female entrepreneurs said that the amount of time and effort required, 72% said the lack of available financial capital and 50% said the lack of available mentors or advisers were the largest challenges in starting their businesses. These challenges, especially the lack of available financial capital are unsurprising seeing how male founders are more than three times as likely as female founders to secure financing through angel donors or VCs, and that 79% of women surveyed reported using their own personal funds to start their business.
- The United State's economy appears to be at a tipping point. Forbes magazine in early 2016 pointed out that women own 36% of all businesses in America and that female entrepreneurs are an "under-tapped force that can rekindle economic expansion." Despite this strong evidence for growth potential, and the empirical data supporting the power of female entrepreneurs, some barriers still appear to exist. Through a reexamination of time resource-cost, accessible capital, and mentor networks for women in entrepreneurship a brighter economic future for all may be achieved.
