Statistics traditionally have not been favorable for female entrepreneurs. According to the Kauffman Foundation, only 3 percent of tech startups are led by women. Just 5 percent of venture capital is invested in women-led startups.
Yet Forbes Magazine called 2014 the break-out year for female entrepreneurs. And there are plenty of promising signs that we are heading in the right direction. For example, nearly 20 percent of early stage “angel” funding was invested in women-led businesses in 2012 – a growth of 40 percent from the previous year. The number of women-led businesses with more than $10 million in revenue increased 57 percent – significantly faster than the growth rate of $10 million-plus businesses overall.
According to the National Association of Women Business Owners, women make up 30 percent of U.S. business owners and employ nearly 7.8 million workers. In North Carolina, the number of women-owned firms has increased 83 percent in the past 15 years, making our state one of the top 10 nationally for women-owned businesses. In 2012 (the most recent year data are available), revenue from women-led businesses in North Carolina was estimated at almost $35 billion – a 44 percent increase from 1997. And even though women-owned enterprises generally operate with far less capital, in the venture-backed tech industry they produce 12 percent higher returns and earn investors a 35 percent higher return on investment.
N.C. a case study
Clearly, supporting female entrepreneurship is not only the right thing to do – it’s the smart thing.
Fortunately, the United States ranks No. 1 among 17 countries on having the best conditions for female entrepreneurship, according to the Gender-Global Entrepreneurship Development Index. In citing some of the key ingredients for a supportive entrepreneurial environment, the Gender-GEDI report highlights the importance of a well-educated talent pipeline, as well as highly accessible relationships and support structures: “Education not only provides high potential female entrepreneurs with the skills needed to grow their businesses, but also broadens their networks, another critical factor for high potential female entrepreneurship success.”
North Carolina is emerging as an exciting case study of where this talent pipeline is being built and nourished.
To equip more women with coding skills, for example, Girls Develop It has created affordable classes for women who want to learn Web and software development through mentorship and hands-on instruction. With chapters in the Triangle and Charlotte, Girls Develop It has had more than 600 women go through its mentorship programs and classes.
Another community spark to give women the tools to grow a business: the recent Triangle Startup Weekend focused on women. While the 54-hour experience in which participants pitch ideas, team up, get coaching and launch ventures typically attracts a crowd that is only 20 percent women, 75 percent of attendees at TSW were women. The winning idea came from Michelle Harper, the founder of Savii Care, a health care tech startup that is now one of the five external companies selected for the competitive Citrix-Red Hat Venture Accelerator.
Structure and flexibility
In May, both the Google-backed organization Soar and North Carolina-based women-led group e51 were launched in the Triangle to provide mentorship for women and to help them continue to work through the difficulties of startup life.
Soar is a volunteer-mentor network, funded with a recent $15,000 Google for Entrepreneurs grant. It holds quarterly education workshops and connects women-led companies with mentors in one-on-one and group settings. Soar is working closely with Google’s 40forward initiative, which is helping 40 startup communities around the world work on solutions to close the gender gap in startups.
As one of Soar’s advisers, Vickie Gibbs from Albright Digital says “we have a group that wants to invest back in the community and see more women be successful, but the needs of women might be different than a male-dominated organization might be in tune with. We can provide structure and flexibility and encouragement for women to go out and do things.”
e51 is a women-to-women initiative that hosts structured and diverse networking and training events. Started by Sheryl Waddell from Blackstone Entrepreneurs Network and Heather McDougall, founder and CEO of Leadership exCHANGE, e51 sponsors “CoffeeConnections” and other focused mentor-peer groups to help women develop a stronger sense of community and a solid female-peer network. Seeking to build a strong entrepreneurial system powered by women, e51 also partnered with N.C. State to host the first Innovative Women’s Conference.
With the breakout year for female entrepreneurs coming to a close, things are just getting started right here at home.
Christopher Gergen is CEO of Forward Impact, a fellow in Innovation and Entrepreneurship at Duke University, and author of “Life Entrepreneurs: Ordinary People Creating Extraordinary Lives.” Stephen Martin, a director at the nonprofit Center for Creative Leadership, blogs at www.messyquest.com. They can be reached at firstname.lastname@example.org and followed on Twitter through @cgergen.