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How Women Entrepreneurs Can Get More Funding

By Gwen Moran

If capital is oxygen, women-owned businesses are suffocating. But some business leaders are trying to perform CPR.

The number of women-owned firms increased by one-and-a-half times the national average between 1997 and 2015—74% versus 51%, according to The 2015 State of Women-Owned Businesses Report by American Express OPEN.

And other research tells us that those women are crushing it. Seed-stage venture capital firm First Round Capital found that its investments in companies with women founders performed 63% better than those with management teams that were all men. A September 2014 study by Babson College found that businesses with a woman on the executive team are more likely to have higher valuations at both first (64% higher) and last (49% higher) funding rounds.

MORE PROFITS, LESS CAPITAL

But, when it comes to money, the numbers are much bleaker.

Businesses with women on the executive team received just 7% of venture funding between 2011 and 2013, according to that Babson study, and only 2.7% of those companies had a woman CEO.

In 2015, just 11% of Small Business Administration 7(a) loans went to businesses where a woman had majority ownership.

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