Since 2007, the number of women entrepreneurs in the US has increased by almost 30 percent, with a majority of women-owned businesses seeing substantial success in their first few years in operation. But despite the growing number of women-led companies throughout the US, over 9.1 million nationwide as of 2019, the challenges facing women in business continue to be substantial. Let's look at some of these top challenges women faced by women entrepreneurs.
Accessing Capital and Funding
In 2014, a study conducted by Babson College called The Diana Project, which began in 1996, reported several statistics that showcase the challenges women entrepreneurs face when obtaining capital and funding for their companies.
- 85% of all venture-capital funded businesses had no women on the executive team
- Only 2.7% of venture-capital funded companies had a CEO who was a woman
These statistics were found despite the fact that companies run by women entrepreneurs consistently perform better than those that are predominately run by men. Companies that have women on their executive teams are more likely to have better valuations at first funding, 64% or higher, and last funding, 49% or higher.
Various social experiments done with members of the banking industry have brought to light the biases that women entrepreneurs face when applying for funding for their businesses.
One study in particular found that when members of the banking industry were presented with almost identical applications by a male owner and a woman owner, the loan officers were reluctant to give loan approval to women candidates who did not have higher education credentials.
While the obstacles related to raising capital are very real for women entrepreneurs, they are not impossible to overcome. Babson College's study also found that venture capitalist firms with women on their executive teams were twice as likely to invest in woman-owned companies than those that didn't.
Doing research on firms that have women in decision-making positions can put women entrepreneurs in a stronger position to raise the capital their business needs.
A survey published by the Women Presidents' Organization, which polled leaders of 258 women-led companies in the US, stated that 41% of women feel that men still have the upper hand in the entrepreneurial field. Women reported struggling to be taken seriously as competent business owners by colleagues. They also reported having trouble establishing strong relationships with necessary vendors and winning client business in favor of their male counterparts.
Women entrepreneurs can combat discrimination in their respective fields by focusing on making strong first impressions when meeting with clients, colleagues, or potential employees. Have a vision for your business and for who you want to be as a leader, and do not deviate from the steps you know you need to take to get there. Try to take unsolicited advice with a grain of salt, and be diligent about what is best for you and your company.
Women entrepreneurs have historically had a general tendency to underestimate what they, and their companies, are capable of. Despite the steady growth of women-owned businesses, the industry is still dominated by men, and can create very frequent "being the only woman in the room" situations for women running their own companies.
Building the confidence to stay true to your values, potential, and your mission can be difficult when women entrepreneurs often do not find themselves surrounded by other women in similar positions.
Create personalized long-term goals for your business' growth and drive to them. Some favorite tips from successful women entrepreneurs to remain confident are:
- Lose the negative self talk
- Accept your limitations
- Stop comparing yourself to others and focus on your strengths and successes
- Be kind to yourself
- Forgive and let go
- Strengthen your foundations of love and support
- Alter your body language
- Make a list
- Write down confidence boosting quotes
- Develop the right mindset
- Practice Gratitude
Remaining confident in yourself and your efforts will help you take all the challenges facing women entrepreneurs head-on.
Establishing A Support Network
Though we have come a long way in terms of strength in numbers, women entrepreneurs can still be hard to find, especially in certain industries. As of 2017, only 17% of startup businesses had woman founders. This means that it can be difficult for women business owners to build a network of women entrepreneurs who are facing the same challenges that they are.
Fundid is on a mission to get women owned business the capital they need to grow so that we can all close the business wealth gap. While 42% of business in the US are owned by women they only account for 4% of revenue generated by private businesses. We spend our time at Fundid thinking about what the world would look like if women also generated 42% of revenue and how to get them the capital they need to make that happen. Fundid is a challenger business bank, business lender and grant marketplace built on from the feedback of women entrepreneurs.