How to Close the Funding Gap for Female Entrepreneurs
Throughout Women’s History Month, we celebrate the economic, social and political contributions that women make to our world. Women account for roughly half of the American workforce, attain higher levels of education than men and are an increasing share of primary or solo breadwinners. There is no doubt that for America to thrive, we must promote the economic empowerment of women. Central to women’s economic success is women’s entrepreneurship, which contributes significantly to overall economic growth and prosperity. Yet female entrepreneurs still struggle to access the tools and resources they need to build their businesses.
According to a recent study by the U.S. Senate Committee on Small Business and Entrepreneurship, the number of women-owned businesses has grown from 4 million to more than 11 million in the last 30 years. Between 2007 and 2016 alone, the number of women-owned firms grew five times faster than the national average. These women-owned businesses employ nearly nine million people and generate more than $1.6 trillion in revenues.
Women-owned businesses are growing at an incredible pace, but these entrepreneurs still face barriers to their success, earning less revenue and having a harder time accessing capital than male-owned firms. Specifically, a 2014 report, “21st Century Barriers to Women’s Entrepreneurship,” found that only 16% of conventional loans go to women. The loans they get are smaller too, with women receiving just 4.4% of the total dollar amount of small business loans.
The good news is that there are numerous resources out there to help bridge this gap and link female entrepreneurs to critically needed capital:
- Women’s Business Centers provide education and technical assistance specifically intended to empower female entrepreneurs. More than 100 Women’s Business Centers operate throughout the country to train and counsel women business owners.
- The U.S. Women’s Chamber of Commerce and other local women’s chambers offer information and networking opportunities, as well as provide assistance in receiving federal contracting certifications for women-owned businesses.
- Online lending platforms like Venturize, SimpleGrowth or SmartBiz Loans are not targeted specifically at female entrepreneurs, but they do help small business borrowers navigate the online lending landscape safely.
- Organizations like the Tory Burch Foundation provide connections to community funders, while also offering education and mentoring programs.
- Grants and competitions like the SBA’s InnovateHER Challenge, which provides grants up $70,000 to female entrepreneurs with businesses that provide products or services designed to impact women and their families, as well as the Amber Grant competition or the Eileen Fisher Women-Owned Business Grant Challenge.
- Venture capital funds that target women-owned start-ups, like the Female Founders Fund, Golden Seeds and Pipeline Angels work to counter the lack of diversity among venture capitalists and angel investors by specifically promoting businesses with women founders.
- Female entrepreneurs more successfully utilize crowdfunding than male entrepreneurs. Resources like CrowdsUnite can help you understand the difference between the various crowdfunding platforms and which one is best for your business.
While this is by no means an exhaustive list of tools and resources available for women entrepreneurs, this list is a great starting point for female entrepreneurs. There’s no doubt that filling the funding gap could unleash enormous economic potential for women business owners and open doors for innovative entrepreneurial opportunities. But female entrepreneurs need and deserve a multitude of tools to help them break through and succeed.