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The state of women’s entrepreneurship in 2019

Feb 27, 2019 | 3 minutes read | Entrepreneurship

As of 2018, women own more than 12 million businesses in the U.S. alone, and women have majority ownership in nearly 40% of all U.S. firms.

You’d think that the state of entrepreneurship and the state of women’s entrepreneurship are one in the same—but that isn’t always the case.

For women, wide involvement in the business world is still relatively new, and we continue to face our own unique challenges and barriers to entrepreneurship. That’s why we’re digging into the data to see where women entrepreneurs stand at the beginning of 2019, the hurdles we still need to jump, and how we can get there.

The state of women’s entrepreneurship

According to SCORE’s The Megaphone of Main Street report, women are making money moves by building their own businesses:

In pop culture, there’s this myth of the “mommy blogger”—women who start businesses (often lifestyle businesses) on the side or in their spare time. The explosive growth in women’s entrepreneurship over the last decade may seem to add credence to that myth, but SCORE’s report noted that 62% of women entrepreneurs depend on their business as their primary source of income.

Women’s entrepreneurship is growing

In most respects, women’s entrepreneurship still lags slightly behind entrepreneurship on the whole—but growth has been explosive and the gap is closing, according to another report.

  • Women-owned businesses grew in number by 58% over the last 10 years. That’s a full five times faster than the average growth rate in the U.S.
  • The number of people employed by women-owned businesses grew by 21%, while revenue jumped 46%, over the same period (2007-2018).
  • Here’s a number to really knock your socks off: an average of 1,821 new women-owned businesses opened every day in 2018.
  • That’s the highest daily average in the last 16 years—and women of color are leading the charge.

Women entrepreneurs across the globe

Don’t think the U.S. is the only country seeing a renaissance in women’s entrepreneurship. Several other nations, including the Philippines and Mexico, actually have much higher rates of female business ownership than the U.S., based on data from GEM’s Women’s Entrepreneurship Report.

  • Globally, 2018 continued a decade-long trend of narrowing the gap between male and female entrepreneurs—an improvement of a whopping 36% over the last 10 years.
  • In 2018, 163 million women started a new business. That’s on top of the 111 million women-owned businesses across the globe at the start of the year.

Funding and venture capital for women entrepreneurs

One area where women entrepreneurs continue to lag grievously far behind their male counterparts is funding. Progress has been slow, particularly when it comes to venture capital funding, largely because male investors are far more likely to invest in male founders—and women venture capitalists make up a tiny portion of the industry.

  • Startups founded by women received only 2% of all VC funding last year. In other words, 98% of VC money went to men.
  • Women who do secure funding raise much smaller rounds than their male counterparts—averaging $5 million versus $12 million.
  • There’s even a gap when we get to the outliers. The largest VC deal won by female founders was $165 million last year. The largest given to male founders was a whopping $3 billion.
  • In the VC industry, male investors outnumber women by a scale of five to one.
  • The problem doesn’t end with venture capital either. Of the total dollars in conventional small business loans, women received less than 4.4%.

Entrepreneurship among women of color

Earlier, we mentioned how women of color are driving the crazy growth in women-owned businesses—and we weren’t exaggerating.

The top challenge women will face in 2019

It’s clear that women entrepreneurs are launching businesses, hiring employees, and raking in revenues on a global scale like we’ve never seen. Despite all that growth and social progress, we’re still facing unique challenges that male entrepreneurs simply don’t.

We talked about business funding earlier, but it bears repeating because women’s access to traditional business funding is pitifully limited.

Speaking to Entrepreneur, serial founder (and one of Forbes’ 30 Under 30) Nadia Genevieve Masri noted, “There are some great male venture capitalists, but the industry itself needs to be conscious of the issue and make way for change.”

For some women, that means starting their own venture capital firm, the one they’d want to pitch. That was Arlan Hamilton’s idea when she founded Backstage Capital—a VC firm that invests in women, people of color, and LGBT founders.

That’s where a big part of the solution lies. Diversifying the VC industry itself offers more underrepresented founders the opportunity to pitch a broader range of business ideas, and actually secure funding.

Women’s entrepreneurship in 2019

Overall, women entrepreneurs have made leaps and bounds over the last decade. We’re launching businesses, growing them to new heights, and tackling barriers as we go.

Here’s to 2019 and another year of progress and innovation!

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