Women across the world recently participated in Global Entrepreneurship Day, with a Global Entrepreneurship Day for Women taking place for the first time this year. I spoke to Alicia Robb, Kauffman Foundation Fellow about how the day is making a real difference for women across the globe.
How has Women's Entrepreneurship Day making a real difference?
While Global Entrepreneurship Week is in its seventh year, this is the first year for the Global Women's Entrepreneurship Day. More than 60 countries participated in events focused on women entrepreneurs. I think like GEW, it will grow every year and have an increasing number of countries participating (150 participated in GEW this year). Raising awareness of gender gaps, as well as highlighting the successes of women will have a real impact in both improving the numbers and raising the exposure of role models that young women can look up to.
How are female entrepreneurs helping to kickstart the global economy?
In terms of numbers, the Women's Survey Paper (attached) estimates that over 200 million women were either planning to start or already operating businesses in the countries included in the 2012 survey. Approximately half of women-owned firms provide or are expected to provide employment for at least one person. Equally important, an estimated 12 million women expressed the intention to grow their firms over the course of the next five years.
What challenges are female entrepreneurs facing?
Women still face challenges in corporate environments. Although women are now well represented in middle management positions, few have reached the executive suite or Board of Directors level. Studies conducted by Catalyst, an organization devoted to expanding opportunities for women, found that women held only 4.2 percent of the CEO positions in Fortune 500 firms in 2013. Similarly, women held only 16.6 percent of the Board seats for these firms. In a study on the development of "high potentials" capable of serving on Boards for both public and private companies, the authors noted that: Men are more likely than women to have career experiences managing people, being responsible for profit functions, and attaining executive status in their current jobs.
A number of the women entrepreneurs we have spoken with allude to the "glass ceiling", which prevented them from advancing to the most senior ranks of their former firms--creating an impetus to start their own. From a public policy perspective, one of our challenges going forward is to ensure that women have advancement opportunities in their firms and organizations. As in the case of educational and experiential gains, these types of leadership opportunities will help to equip them with the skills needed to launch growth-oriented firms.
One barrier that still remains, however, is the barrier of securing adequate financial capital to launch and grow a firm. As we discuss in the study, current research suggests that women entrepreneurs have largely leveled the playing field in terms of access to debt capital, although they continue to borrow smaller amounts than men. However, a significant gap between women and men remains, when it comes to securing sources of equity capital in the form of angel investments, venture capital, or private equity . This is not necessarily a problem for smaller firms, which tend to rely on internal sources of capital and external debt in the form of bank loans. Nevertheless, accessing sufficient amounts of external equity capital is a major impediment for women entrepreneurs who launch growth-oriented firms. As we ride The Next Wave together, we will explore the financial challenges faced by growth-oriented women as well as the financial strategies that successful women have employed to overcome those challenges.What advice does the Kauffman Foundation offer for female entrepreneurs to help them succeed?
- Make a business plan, create milestones, and develop a strategy to reach them.
- Know when to raise money and how you will turn into value.
- Have a baseline and measure milestones.
- Choose investors based on their ability to make you and your company better
- Focus on creating the right business.
- Find individuals you want to work with and identify people that have expertise in that field.
- Surround yourself with great people who can help put together financial plan and coach you.
- Practice the pitch. You do get better by pitching and talking to investors. Real life experience pitching can be transformational and you can get things beyond money.
What is the future like for female entrepreneurs?
Today's women entrepreneurs are better educated, better trained, and better prepared than ever before. From the standpoint of education, the number of women graduating from college actually exceeds the number of men.
In addition to these educational gains and the new opportunities they unlock for women entrepreneurs, a major social and cultural change has been the number of women who work outside of the home. Working women are not necessarily a new phenomenon, but a growing number of these women are now holding positions of influence and power in both large and small corporations. These positions help women develop skills in a broad range of areas including the ability to manage others, the ability to make important and often difficult decisions, and the ability to see the "big picture". Taken together, these educational and workplace changes have helped to equip a growing number of women with the human capital required to launch growth-oriented firms.