This Is The State Of Female Entrepreneurship In 2020
There are approximately 252 million women entrepreneurs around the world—and the numbers are rising every day.
Ask any VC with knowledge of the data, and they'll tell you that women entrepreneurs are “an underlooked asset class that is overperforming,” in the words of Jane VC founder Jennifer Neundorfer. From Emily Weiss' Glossier to Lucy Liu's Airwallex, both of which reached unicorn status last year, female founders are increasingly behind some of the world's biggest startups.
Boston Consulting Group found that despite the evident funding gap between male and female entrepreneurs, “startups founded and co-founded by women are significantly better financial investments. For every US dollar of funding, these startups generated 78 US cents, while male-founded startups generated less than half that—just 31 US cents.”
These stats are encouraging—but they don't tell the full picture. In honour of Women's History Month, here are 10 stats that offer a snapshot of the road to gender parity for female entrepreneurs.
Last year was a historic one for women entrepreneurs, with 21 female-founded unicorns being born, compared with 15 in 2018. The number of female-founded billion-dollar startups has grown slowly from four in 2013 to eight in 2017, jumping significantly in 2018 and 2019.
HSBC reports that over a third of women entrepreneurs face gender bias when raising capital. Multiple academic studies show that there is strong gender bias in many different elements of the pitching process, with one study finding that women are asked different questions than men when pitching to VCs.
Men were more likely to be asked ‘promotion’ questions, focused on potential gains, whereas women were asked more ‘preventative’ questions, focused on potential losses and risk mitigation. Harvard Business Review reports that “entrepreneurs who addressed promotion questions raised at least six times more money than those asked the prevention questions.”
A desire to pursue their passion is the reason most women step into the world of entrepreneurship, according to a global survey, with 48 percent saying it was their main motivator. Secondary reasons were the desire for financial independence (43 percent) and flexibility (41 percent).
It is becoming increasingly common for women to launch a side hustle in addition to their nine-to-five job—75 of women have a startup on the side, compared to 58 percent of men.
See also: Michelle Obama On Leadership, Balance And Battling "Imposter Syndrome"
Women secure an average of 5 percent less capital than men globally as a result of investor bias, according to HSBC. In the US the gap widened to 8 percent, France 7 percent and the UK 6 percent.
Some investment funds have chosen to completely dispense with the pitching process, instead taking applications online and evaluating companies "by the numbers". One such fund, Social Capital, reports that 40 percent of the founders they funded using this new system were women.
Women entrepreneurs need to invest more of their own money to be able to start a business, according to an HSBC report. On average, women globally put US$151,000 of their own money into their businesses. In Hong Kong, Mainland China and Singapore, the numbers are higher than average.
See also: The Co-Founder Of Women-Only Member's Club AllBright On The Power Of Community
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Greenlane, a cannabis accessories and CBD startup, went public in 2019 with an all-male board. So far, so normal. The unexpected part? Out of the 25 largest IPOs in the US in 2019, Greenlane was the only company without a woman on its board—a significant increase from the previous years, when roughly half had all-male boards.
There are 114 percent more women entrepreneurs than there were 20 years ago in the US, according to Business Insider, equating to about 849 new female-founded businesses per day.
See also: How Female-Led Beauty Unicorns Are Transforming The Industry
According to the Index of Women Entrepreneurs 2019, the US is the most female-entrepreneur-friendly country, followed by New Zealand and Canada. The highest ranked in Asia was Taiwan, in sixth place, followed by Singapore in eighth and the Philippines in 11th.
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