Women-owned businesses are important for our economy. According to an analysis produced by the Boston Consulting Group, if women participated equally to men as entrepreneurs, global GDP could increase by approximately 3 to 6 percent, adding $2.5 to $5 trillion to the global economy. But investment and growth, in and for women-owned firms, trails men in nearly every measurable category: female-led start-ups constituted 15.7 percent of deals in 2019. This doesn’t have to be the case. This brief provides an overview of why driving access to capital for women entrepreneurs is a passionate focus for WBC.
Why focus on entrepreneurs?
- Between 2014 and 2019 the number of women-owned businesses grew by 21% to a total of nearly 13 million (12,943,400). Firms owned by women of color grew at 43% during that same time period (2019 State of Women Owned Business Report/American Express)
- Women-owned firms account for 39% of all privately held firms and contribute 8% of employment and 4.2% of revenues (NAWBO)
- 42% of newly created women-owned businesses are started by black women; Latinx women represent 31% of newly created women-owned businesses (American Express 2019 State of Women-Owned Businesses); however, only 4% of the female founders who raised equity financing were black and 2% were Latinx (2018 Project Diane by digitalundivided)
- According to an analysis produced by the Boston Consulting Group if women participated equally to men as entrepreneurs, global GDP could increase by approximately 3% to 6%, adding $2.5 to $5 trillion to the global economy (HBR, Shalini Unnikrishman and Roy Hanna: The Trillion Dollar Opportunity in Supporting Female Entrepreneurs, 10/31/2019)
- Female-led start-ups constituted 15.7% of deals in 2019 (Pitchbook).
- Morgan Stanley estimates that VCs could be missing out on as much as $4 trillion in value by not investing in more diverse founders
- As of 2019 African American/Black women-owned business numbered 2,681,200 or 21% of all women-owned businesses, having grown by 12% in 2019 (vs 8% annual growth rate between 2014 and 2019) (2019 State of Women Owned Business Report/American Express)
- As of 2019, African American/Black women-owned businesses earned average revenue of $24,000 per firm vs $142,900 among all women-owned businesses (2019 State of Women Owned Business Report/American Express)
- The disparity between minority and non-minority women is increasing In 2014, minority-owned businesses average $67,800 in revenue; by 2019 the average had dropped to $65,800. In 2014, non-minority women- owned businesses average $198,500 in revenue; by 2019 the average had jumped to $218,800 (2019 State of Women Owned Business Report/American Express)
So what can we do? We’ve partnered with an incredible group of organizations to drive change: ASTIA; Enterprising Women Magazine; Golden Seeds Ventures; Springboard Enterprises; SheEO, WBENC
Together, we will engage with relevant organizations to build a database of women entrepreneurs with highly successful businesses segmented by size of revenues, work to educate women entrepreneurs on the importance of the appointment of boards and advisory boards to help scale their businesses and gain access to capital, and collaborate to provide relevant resources, webinars, and more through our network of partners.
We believe that through these actions we can see:
- 20% increase in women owned businesses generating $5 million or more by 2025
- The average revenues for minority women-owned firms grow by 25% by 2025
- The percentage of venture capital available to women founders doubles by 2025 from 2.3% in 2018