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Kay Koplovitz

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Women: the Emerging Market in High Growth Businesses

Posted: 01/04/12 04:32 PM ET

Women hold 80 % the purchasing power for consumer goods in the U.S., a sector accounting for a critical 70% of the U.S. economy. So we already know that women are essential to the revival of the U.S. economy.

But did you know that women are also a rising force in building the economy as founders of high growth companies, a sector that contributes nearly 100% of the net new jobs in the past five years?

There are compelling reasons for the rise in women playing the critical role in building new, high growth sustainable businesses. Let's start, with Title IX, which many think of as a sports related benefit, giving women equal rights to sports participation. The reality is that it gave women equal access to educational pursuits, medical school, law school, business and engineering schools and much more.

The results have been spectacular. According to the National Center for Education Statistics In 2010, women earned, 57% of all Bachelor's Degrees, 60% of all Master's Degrees 52% of all Doctoral Degrees 46.9% of all Medical School Degrees 47.2% of all Law School Degrees.

With increasing educational degrees, women are gaining in annual income. One has to peel this back from national statistics that show, all wages across all industries, women are still paid only $.77 on the dollar compared to men. But when you start to look at the wages of women with college and advanced degrees you see a different story. Women are gaining in wage increase at a rate faster then men. In fact, in some fields of medicine and business, they are outpacing men in real wages.

Importantly, women hold 51.3% of all the wealth in the U.S., a whopping $14 trillion. This gives women the ability to fund fast growing businesses. Just one percent of that wealth, $140 billion, is greater than the entire venture capital market invested in its most robust year, 1999, when $104 billion was invested.

So what is needed to spark more of this investment potential?

Human Capital. That is the main connector to all these forces of education, skills and capital.

The story emerging is that women entrepreneurs approach high growth businesses in a somewhat different way than the typical male entrepreneur or investor. Rather than being singularly focused on the activity in the shark tank, women prefer to swim with dolphins. In other words, they prefer a supportive network rather than a challenging one. The difference is noted in my TedXBayArea Ted talk, in which I describe the differences. The main point is that they can both be successful. It's just that women get there via a different route than most of their male counterparts.

At Springboard Enterprises a venture catalyst that identifies, selects, trains and presents women entrepreneurs to the venture capital markets, we have seen a growing market of successful entrepreneurs who are building scalable businesses, creating wealth and jobs which we know are critical to energizing this economy.

We have results, and they are impressive. Of the nearly 4,500 companies we have screened in the first 11 years, we have presented 481. Of these 85% have raised capital A total of $5.5 billion, 80 % are in continuing business today. A third have already had positive liquidity events for their investors, including 10 IPO's.

Importantly, they have created over 20,000 jobs. What is the secret sauce in this success story? Human Capital.

In my next posting, I will describe the emerging market of women successfully building high growth businesses, the challenges and the successes. Importantly, why it's important to recognize this emerging growth sector now.

 
 
 

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