One entrepreneur launched a personalized wedding-planning service. Another created a personal fitness app that connects busy executives with personal trainers and yoga instructors. Yet another started a company where customers pay to have someone else wait in long lines for them. These were just a few of the innovative business ideas pitched at the Female Founders Alliance’s Access Seattle event designed to teach female entrepreneurs how to raise capital and pitch their stories to both potential funders and the media. It’s been well documented that women executives face unique hurdles.
At the event, some said they didn’t think they were taken seriously as entrepreneurs. Others told stories of blatant sexism and difficulty raising money. It’s impossible to comment on individual companies because I’m not privy to balance sheets or the intricacies of funding and lending decisions, but overall, the statistics are grim. Female-founded startups in the United States received just 2.3 percent of venture capital investment last year, according to an analysis by Seattle-based PitchBook.
And that represents an upswing. As PitchBook noted, VC funding for companies founded by women is on the rise. In the past 11 years, 530 such companies in Washington state snared $2.4 billion in funding. That sounds impressive, but it’s just a tiny slice of overall investment.
That’s why organizations such as the Female Founders Alliance (FFA) are so important. What began as a Facebook group to unite female entrepreneurs has become a national organization that holds educational and networking events. Last year, it launched an accelerator program to help female CEOs raise their initial rounds of venture capital.
Education, though, is only part of the answer. Many women at the event have embarked on crowdfunding or Kickstarter campaigns. Others have gone to alternative lenders or the U.S. Small Business Administration.
“When you get to any inequality gap that big, there’s no simple answer. Lots of things need to be done, but these are all solvable things,” says FFA founder Leslie Feinzaig, who adds that women of wealth tend to invest more in philanthropy than startups. “We need to get more female partners to VC firms. Start hiring women out of business school and promoting them to partner. There needs to be more awareness on the part of investors of their own biases.”
Men must be involved. The cumulative lifetime earnings gap between women and men exceeds $1 million, according to a study from Merrill Lynch. As Feinzaig notes, “It’s incredulous to think that we’re going to solve this problem just by getting more women investors. It’s not a good outcome if we segregate ourselves. The future is integrated.”
Despite the hurdles, women are increasingly starting companies. Women own four of every 10 businesses in the U.S., according to the Women’s Business Enterprise National Council. Last year, 1,821 women-owned businesses were launched every day.
A founder’s business plan and background are critically important. Gender is not. Enterprising women, though, have long defied the odds. There’s no telling what could happen with a level playing field.