A Diana International Impact Report, co-authored by professors from Babson College, discovered a worrisome challenge for women in entrepreneurship. Despite female entrepreneurs being equal or majority owners of 45% of US firms, most report difficulties securing growth capital. Those studied also believe that entirely new funding models are necessary.
Co-author of the report and Babson’s Vice Provost of Global Entrepreneurial Leadership Candida Brush, phrased the aims of the report simply. “We need to create, identify and support new models of funding for women entrepreneurs because their access to growth capital is a serious and continuing problem.”
Despite the notable percentage of female ownership of US firms, 92% of all investors are male. Below 15% of businesses funded by VC have women on their team, and a miniscule 3% of companies funded by VC have a female CEO. By identifying disruptive funding models across the six processes driving entrepreneurial development, the report believes these numbers can be changed.
But new funding models won’t address the gender inequality in investment. To fight that problem the report also suggests training more women investors. With more females in the investment ecosystem, new capital flows towards women-led and owned businesses should open. 37 Angels is doing exactly this, constructing a community of female investors to educate early-stage investors. Female-focused accelerators are another step in the right direction.
