The number of women-owned businesses in the U.S. increased 44 percent from 2001 to 2011, says the Center for Women’s Business Research.
Raising capital is a major problem for startups because they need money to grow. In the U.S., only 2 percent of women-run startups receive funding from venture capitalists, says a study by the National Foundation for Women Business Owners and Wells Fargo & Co.
Yet women in the U.S. own 38 percent of U.S. businesses, or 9.1 million companies, says the study. Women-owned firms produce $3 trillion annually in the U.S. economy and create 16 percent of U.S. jobs.
More organizations are providing funding for women-owned startups. Springboard Enterprises in Washington, D.C. is one of these. The organization introduces women-owned startups to investors.
Springboard began 15 years ago. It has helped about 600 companies that are fast growing and women-owned raise $7 billion globally. According to their website, the companies created “tens of thousands of new jobs” and generated “billions of dollars” in annual profits.
Kay Koplovitz is a co-founder of Springboard Enterprises.
“Women need to access the so-called ‘Stiletto Network’ to push their businesses forward,” she told TheStreet.com. Stilettos are high-heeled shoes worn by women. Koplovitz is saying that women need to tap into capital of successful women entrepreneurs and female business leaders.
Golden Seeds in New York City is another organization that focuses on investing in women-owned businesses. Golden Seeds has more than 285 women angel investors in the U.S.
Some companies also give cash to innovative women-owned startups. Cartier is one. In 2006, the French luxury-goods firm partnered with McKinsey & Co., a consulting firm, and INSEAD business school in Paris. They created the Cartier Women’s Initiative Awards.
They run an annual competition to recognize top female entrepreneurs from around the world. Each winner gets $20,000, and experts from McKinsey and INSEAD coach them.
There were six winners in 2015 worldwide. Hannah Chou and Mom Huang from Taiwan were the winners from the Asia-Pacific region. Their company is called Our City Love Social Enterprise (www.ourcitylove.org).
The firm created two mobile apps to help disabled people find restaurants in Taiwan.
Another factor fuelling women’s entrepreneurship is the rise of “incubators” for startup companies. Incubators are often located at universities. They assist startup companies.
They provide expert entrepreneurs as mentors and introductions to investors. For example, Babson University in Wellesley, Massachusetts, has created the Babson’s Center for Women’s Entrepreneurial Leadership. They have a business competition for women entrepreneurs with a grand prize of $250,000.
Technology is another factor driving women’s entrepreneurship. Tools like Skype, social media and web programs that share documents help. It is now easier and cheaper to work globally for both men and women entrepreneurs.
Lastly, experts say great innovations come from anyone — no matter the gender.
Words in This Story
entrepreneur – n. a person who starts a business and is willing to risk loss in order to make money
funding – n. an amount of money that is used for a special purpose
capital – n. money, property, etc., that is used to start or operate a business
angel investors - An investor who provides financial backing for small startups. Angel investors are usually found among an entrepreneur's family and friends.
venture capitalists – expression people who provide money that is used to start a new business
startups – n. a new business
incubators – n. an organization or place that helps in the development of new businesses
innovation – n. a new idea, device, or method