The State of Female Entrepreneurship

September 30, 2020

There are approximately 252 million women entrepreneurs worldwide, and 11.6 million women who live in the U.S. ​Within the last five years, the number of female entrepreneurs has been steadily growing. ​While 252 million is an outstanding accomplishment, the road to this triumph came with several internal and external obstacles. From the fundamental hurdle of learning to excel as a leader in having to navigate gender inequality, it is clear that the path to female entrepreneurship was not an easy task.

A recent study done by HSBC shows that 1/3 of women entrepreneurs face gender bias when attempting to gain capital. ​For a majority of women, this was embodied in a series of questions. Women were asked: “If they are married or have children and how they can run their startup if they have family responsibilities.” ​This transparent gender stigma was discussed by Norma Chu, the founder, and CEO of DayDay Cook, who stated,

“In more than half of the pitches I have done so far, I have been asked if I’m married or have kids. I don’t normally get asked about credibility as a business leader at all, although this is usually because I think investors evaluate this when they dive into our business performance”.

The study also showed that women globally secure 5% less capital than their male counterparts. ​Within the United States, the difference was an astonishing 8% as a result of that gap. HSBC concluded that women entrepreneurs tend to invest personal finances to start their business. Despite the evident obstacles in place, female entrepreneurs have been able to find good funding opportunities.

According to Pitchbook, in 2019 venture capital invested 3.3 billion dollars in all-female founding teams. This investment represented 2.8% of capital across the entire U.S. startup community. In 2018, venture capitalists made 580 deals worth about $3 billion, a staggering increase from 2.1 billion in 2017. Crunchbase reported that over $20 billion in global capital was invested in female-founded and female co-founded startups so far this year. $5 billion was invested in female-only founded startups. The remaining $15 billion went to startups with female and male co-founders.

​However, in recent years, there has been a trend of various firms increasing their diversity. A recent study by Axios analysis showed that in 2017, 7% of VC firm’s employees were women, and in 2018, 8.93% of employees are female.

Against these odds, female entrepreneurs continue to break glass ceilings and oppose gender discrimination. Historically, women have preserved in creating and cultivating bright futures. The focus on economic empowerment is only the next step in fostering gender neutrality.

Over to our readers, what are your stance on female entrepreneurs’ present state and the hardships they endure?