The fortunes of female entrepreneurs in the US are being severely hampered by the attitudes of capital investors and loan offices, according to group of successful businesswomen...
The group, which included Shark Tank regular and New York real estate entrepreneur Barbara Corcoran, were testifying on Capitol Hill to the Senate Small Business and Entrepreneurship Committee about the adverse business conditions – something which many female entrepreneurs will agree are is all too familiar.
Corcoran claimed that investors are twice as likely to back a start-up fronted by a male entrepreneur, resulting in far fewer women at the heads of companies. “I found it enormously difficult to compete with the men,” explained Corcoran, reflecting on her own experiences. “I found it particularly difficult when I tried to grow my business, because I had no access to cash while the men had easy access to whatever capital they needed to continue to grow and compete with each other.”
A Harvard Business School study, cited by The Washington Times, demonstrated the extent of the bias against female entrepreneurs who are trying to find funding for their business. As part of the study participants were shown two pitches, the words and images of which were identical, however one was narrated by a male and the other by a female. After viewing both pitches a sizeable 68 percent said they would have invested in the one delivered by the man, compared to only 32 percent of those who claimed they would have chosen to back the female led pitch. Whether unconscious or not, it’s clear that gender bias appears to be a determining factor when awarding funding.
The difficulties of securing funding for female entrepreneurs is by no means a problem reserved for those operating in the US, our How to find funding series has uncovered similarly tough conditions in the UK. The extent of the problem has resulted in many women turning to crowdfunding to secure backing, with 95 percent of angel investors reported to be male.
Despite the challenges many face, the apparent wellbeing of female entrepreneurs seems to be inspiring record numbers of women to become self-employed, with one out of every 10 women in the US now either starting or running a business. These numbers, uncovered by the latest addition of the Global Entrepreneurship Monitor Report, go some way to demonstrate that funding worries are not a decisive factor in putting off many women considering going into full-time self-employment.
Are you a female entrepreneur? Have you struggled to find funding? Let us know your story…
Thumbnail taken from gettyimages.