Investors Starting to Favor Female Entrepreneurs Based on Business Performance
Updated: Mar 29
Despite capital investments still favoring their male counterparts, female entrepreneurs are a driving force in today’s economy. No wonder. While still the minority, women now own 36% of businesses globally. And in the U.S., women are starting and running businesses at a stunning rate. According to the annual State of Women-Owned Businesses Report, commissioned by American Express. In 2019, American women started an average of 1,817 new businesses per day between 2018 and 2019, down only slightly from the record-setting 2018 number of 1,821. These businesses represent 42% of all U.S. businesses—nearly 13 million—employing 9.4 million workers and generating revenues of $1.9 trillion.
Women-run companies generate a 35% higher ROI than companies managed by men according to the Kauffman Foundation. When it’s venture-backed, the number further increases by 12%. Even with the funding gap, women-run companies generated a 10% cumulative revenue within 5 years. For that reason, many investors are starting to favor women-run businesses.
Although the investment tide may be changing, only 39% of women think they are capable of running their businesses, compared to 55% of men according to Fundera.com. Women lack confidence. There is no real difference between skill sets, women owned businesses statistics show, but it is only a matter of perception and confidence. While the differences from their male counterparts may at times feel like a setback, they've ultimately become an incredible advantage, providing them with unique perspectives, experiences, and tools they use in their work and lives.
What many women don’t realize is that when you start your own company, one of the things that investors look for is what gives you an unfair advantage over the competition. Women’s unique gifts —point of view, what they're drawn to, personal expertise — that's their unfair advantage. In the Journal of Entrepreneurship and Organization Management, a comparative study was conducted that showed women entrepreneurs to be more autonomous, more positive, more aggressive, have better common sense, think more critically, and have a greater resolve to be successful than men.
At Argona, we feel that women should identify their differences, both internal and external, and celebrate them. We also believe it is important for female entrepreneurs to seek out people who will recognize and partner with you in elevating your differences — people that make you hopeful, especially in this time of great change. Being different means you have an edge — you just have to discover it. Sometimes your difference turns out to be your biggest asset and your best friend. Once you realize it, your edge will be your best source of confidence. Our advice - show up as your most authentic self. Finding the confidence to hold space while being exactly who you are is the key to success. There's nothing more powerful than being unapologetically yourself.