Your favorite yoga pants from Lululemon, Alo Yoga, and Prana? Also owned by men.
Big name companies- from Sephora to Nuuly clothing rental, Tiffany and Co. to Chanel, are all also owned by… you guessed it… men.
Please don’t even get us started on how difficult it is to shop women-owned at the local grocer. While women represent 51% of the U.S population, research shows that they make up only 33% of business owners with employees.
Furthermore, according to the Brookings Institute, “people of color are 40% of the population, but only 20% of the nation’s 5.6 million business owners with employees.” While this year saw a record number of female Fortune 500 CEOs, women still only make up 8.2% of the list, and women of color, only 1.2%.
Turns out, there are a lot of challenges facing female entrepreneurs and business owners. For one, access to capital remains a barrier for women looking to start their own businesses.
Take for instance research conducted by Harvard which found that the 30-year average of female founders’ share of venture capital (VC) funding is 2.4%, and nearly three-quarters of United States VC firms do not have a single female investing partner. Additional research found that 63% of women-owned businesses were funded with the founders’ own savings.
While Black Women represent the highest rate of business growth over any other group, only 0.0006% of VC funding went to Black women founders between 2009 and 2017. In the same period, only 0.32% went to Latina founders.
In Atlantic Canada, businesses owned by Indigenous people contributed $1.6 billion to the regional economy between 2012 and 2016, and those owned by women dominated sales growth (70% versus 50% for men) during the same period. Nonetheless, Indigenous women report access to funding and resources as a significant barrier to starting and growing their businesses. Furthermore, 62% of women entrepreneurs report that they experienced some form of gender bias during the funding process.
Research further reveals that women are about half as likely as men to receive a Small Business Administration loan, with only 3.2% of all women receiving a loan, versus 6.4% for male business owners. What’s more, when women receive these loans, they receive 2.5 times less than male business owners.
As structural and systemic barriers for women seeking to start their own businesses persist, one report suggests that the imbalance in access to capital for women and minority-owned businesses represents up to $4 trillion in missed revenue.
While the World Economic Forum’s 2020 Global Gender Gap Report estimates that closing the gender gap is nearly a century away, supporting female entrepreneurs and women-owned businesses is a good place to start.
Boston Consulting Group found that women-led startups “ultimately deliver higher revenue––more than twice as much per dollar invested” and that these same businesses are also “more likely to be focused on making a social contribution and building good relationships with employees.”
And research found that despite facing greater challenges at work than men, women managers do more to support their teams, and are more active champions of diversity, equity and inclusion (DEI).
Research shows that businesses with more women in senior positions are more profitable, more socially responsible, and provide safer, higher quality customer experiences-- among other benefits.
So the next time you’re looking for that perfect mascara, your new athleisure fit, or a gift for your friend, we encourage you to pause and consider where and who you’re supporting, and ask yourself: is there a business owned by a female entrepreneur or a woman of color who I can purchase this from? (Hint: we’ve linked a few of our favorites to get you started!)
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