Women are Driving Business Growth
Women are creating more businesses than their male counterparts, and African American and Latina women are driving that trend. However, women, especially non-white women, still lag in revenue and job creation. According to the report State of Women Owned Businesses From 2017 to 2018, women–owned firms—defined as firms that are at least 51% owned and controlled by women—grew by 6% compared to 1.6% growth by all firms. Women make up 40% of all firms, but their numbers have been growing at an average 4% per year for the past decade, compared to 1% for all firms. If that growth rate continues, women are on track to become the majority of small business owners.
Women Owned Businesses by the Numbers
These women-owned businesses employ 8% of the total private sector workforce and contribute 4.3% of total revenues. When firms that are equally owned by women and men are included, those numbers jump firms at least 50% owned by women account for 48% of all businesses, employ 14% of the workforce and generate $3.1 trillion in revenues (7% of revenues). Yet Less than 1% of black women founders get VC funding. What does this mean for the future of inclusive innovation?
The Failure of Venture Capital
The Venture Capital industry is 70% white, 82% male, and only employed eight black women and two Latinas. With such homogeneous and insular industry statistics as these, it can easily lead to under funding, or not even finding, good technology and founders born of these communities. Black women are the most educated and entrepreneurial group in the U.S., yet they receive less than 1% of VC funding. What is the solution to this financial and cultural conundrum.
While many women pursue the dream of having their own business, many fail because of insufficient capital to cover start-up and operational costs. And that’s unfortunate because research shows that women-led business enterprises are more profitable. Enter Crowdfunding frustrated female entrepreneurs struggling to get funding should set up a Kickstarter or Indiegogo page. While female-led ventures have long struggled to get financial backing from banks and investors (who are predominantly male), a new Indiana University report finds that women actually have an easier time getting money on crowdfunding platforms than men do.