Since the early 1970s, the number of women-owned businesses has increased dramatically, rising from 4.6% of all firms in 1972 to 40% in 2018. Today, women own four out of every ten businesses and they are starting companies at one and a half times the average rate. Although female-led businesses are on the rise, we must recognize the fact that these entrepreneurs still continue to face many challenges – particularly when it comes to funding and growing their business. Here, we look at a few key issues facing female entrepreneurs and how the Enthuse Foundation aims to help to address them.
Lack of Mentorship & Networks
Despite the advances women have made in the workplace, there continues to be a shortage of positive role models and mentors to inspire and offer guidance to aspiring and up-and-coming entrepreneurs. Forty-eight percent of female founders state that a lack of available mentors or advisors limits their growth. In fact, 10% of those women who have access to a mentor go on to launch businesses, compared to 2% who do not.
Knowing where to start and how to build a support network is not always easy. For that reason, The Enthuse Foundation is working to build a mentorship program and support network for women-owned businesses. Through our mentoring platform, women will have the opportunity to tap into the expertise of successful women across a variety of industries. Additionally, bringing together influential women for networking events and panel discussions, we will address the challenges women face and offer insight on how to overcome them.
Insufficient Access to Capital
There is an enormous gender gap in venture capital funding in the United States. According to VC database Pitchbook, in 2017, all-women teams received only $1.9 billion (or 2.2%) of the $85 billion venture capital in the U.S. while all-male teams received $66.9 billion (or 79%).
Much has been written on why this continues to happen, but the fact that there are simply fewer female VCs only tells part of the story. We need to address the fact that there’s inherent bias in the industry. According to a Harvard Business Review article that explored this topic, VCs tend to “invest in familiar social networks,” – in other words, other male-led ventures. The author goes on to refer to another study showing that both men and women who sought initial stage funding saw a dramatic increase in investment when they had a social connection with a VC. Through the Enthuse Foundation Pitch Nights, we will be offering women entrepreneurs the opportunity to meet and learn from investors, work on their business pitch, and receive the valuable feedback they need for success.
Studies have shown that women are generally more risk-averse than men and that trait often discourages some from entrepreneurship or taking the risks that build high-growth businesses. However, as women connect with mentors and form communities where they can get emotional support and practical advice, they will gain the confidence they need to launch and grow their businesses. The Enthuse Foundation aims to create those communities of female entrepreneurs which will inspire and motivate their peers.
Stay tuned to hear more about our events and to register as a mentor or mentee by signing up for our newsletter.
Source: American Express 2018 State of Women-Owned Business Report
"Although female-led businesses are on the rise, we must recognize the fact that these entrepreneurs still continue to face many challenges - particularly when it comes to funding and growing their business."BACK TO FOUNDATION