Women have made considerable strides in the corporate landscape over the years. Not only are females gaining high-level positions within private firms, they're also dominating the entrepreneurial landscape. According to the National Association of Women Business Owners, in the United States alone, “More than 11.6 million firms are owned by women, employing nearly 9 million people, and generating $1.7 trillion in sales as of 2017. Women-owned firms (51% or more) account for 39% of all privately held firms and contribute 8% of employment and 4.2% of revenues.” Although there has been significant growth, women in business still have a harder time acquiring small business funding when compared to their male counterparts.
Randi Schochet, vice president of brand strategy at American Express, noted in a statement that the data suggests women are now choosing a career path of entrepreneurship, something that has been a growing concern for women's organizations. Susan Duffy, the executive director of the center for women's entrepreneurial leadership at Babson College, told Fox Business News that this is positive and exciting news.
Although a growing number of women are launching businesses, it is harder for them to raise small business funding and secure funds from venture capitalists or angel investors. Whether or not it's gender bias or a lack of interest is debatable, at least according to the various comments from an array of female business leaders.
Lisa Falzone, CEO and co-founder of Revel Systems, opines in Entrepreneur that the venture capital field has made it more difficult for women entrepreneurs to garner funding, which can essentially help grow a company quickly. This is bad news for the economy. Citing data from The Economist, Falzone writes that if women had the same amount of capital as men they would add six million more jobs to the overall economy, including two million within their very first year. She believes the problem is the paucity of women on venture capitalists boards and the fact that men are likelier to select those who are similar to them.
However, Lynn Perkins, co-founder and CEO of UrbanSitter, told Forbes "that people are judged primarily by their skills and ability, and not by their gender." Perkins believes if female entrepreneurs walk into a room with an idea that they believe will be an immense market opportunity then VCs will be open to the idea and not focus on gender. Nevertheless, female entrepreneurs need funding, and they may seek out alternative funding options to launch a business and cultivate an idea.
When financial institutions are no longer a reliable source of funding, small businesses are beginning to turn to business cash advances. This method of future receivables provides retailers with an opportunity to cover short-term expenditures or to invest in long-term business solutions. It's fast, easy and affordable for cash-strapped entrepreneurs.
The facts state that women entrepreneurs offer advantages for the economy, particularly at a time when we need healthy growth. If female business leaders can't raise enough small business funding to experience business growth then this could hinder the marketplace and labor market. Alternative sources of funding can be ideal solutions for women-owned small businesses.
