According to the US Small Business Administration, over 36 percent of all businesses in the United States are majority-owned by female entrepreneurs.
No one with any credibility will pretend there are not still significant challenges for professionally minded and career-dedicated women in today’s business world, but facts and figures like those above are, in a word, heartening. To be able to step back and see the phenomenal impact that women are having in the business world should be an encouragement to every young woman coming into her own and setting her sights on the corporate sphere.
When talking about Venture Capital (VC), however, the panorama seems to shift. Considering the fact that the total number of women VCs declined by 40 percent in the 14 years between 1999 and 2013, we have to take a moment and ask ourselves why this is. Naturally, this significant drop raises some very serious concerns, ranging from the highly complex reflections of social issues, to the more black-and-white problems that are created by having less women established as VCs: One of the most significant of which is that, according to Forbes contributor Geri Stengel, women venture capitalists are much more likely to fund women entrepreneurs and founders than are their male counterparts. Individually, this assertion would beg addressing.
Of the total $85 billion invested by venture capitalists in 2017, a mere $1.9 billion was allocated to women-led teams; that’s only 2.2 percent of total funding. While this may seem (and it is) rather glaring, it’s worth noting that this is the highest percentage of funding of any previous year, barring 2014. Inc.com reporter Emily Canal suggests that, aside from getting more female VCs in the mix, female entrepreneurs should also be looking to crowd-funding options, as women tend to raise considerably more than male founders in that arena.
While it goes without saying that an increased number of female venture capitalists would be a net positive and is something to be strived for, perhaps the single greatest argument for getting those numbers up, in particular, is innovation.
Innovation is one the key elements that produce a powerful market impact, and Geri Stengel tells us that “innovation favors those who take the path less traveled.” Venture capital investors tend to follow a line of regularity, rarely stepping outside the modus operandi, but the fact remains that diverse and female-led companies are on the rise, and will continue to grow. Stepping outside the norm is the key to ensuring that no good business (or major return potential) is left behind.
Perhaps one of the best strategies out there right now would be — rather than focusing completely on VCs — for women founders to also look toward foundations and NGOs, which have mission statements beyond simple profit margins. As such, they tend to be more prone toward higher diversification in funding and investment that nominal VC funds.
All in all, the clever executive will align herself with the most prominent and dynamic opportunities, as we look forward to writing next year about the new (and hopefully higher) percentage of venture capital funding going toward female entrepreneurs and the amazing work their companies are doing.
Stewart, Cooper & Coon, has helped thousands of decision makers and senior executives move up in their careers and achieve significantly improved financial packages within short time frames. Contact Fred Coon – 866-883-4200, Ext. 200