by Yolanda Goodloe | February 1, 2024
The startup world is witnessing a gradual but powerful shift towards gender inclusivity, with women-founded startups making their mark. In 2021, an encouraging 49% of startups were formed by women, showcasing a promising trend in the entrepreneurial landscape. While the percentage of startups with solely female founders stands at 2.5%, the momentum is undeniable, with a 6% increase from 2017. However, challenges persist, particularly in the realm of venture capital backing. Since 2016, startups founded by women have received only 4.4% of venture capital funding. Yet, the tides are turning, with startups that have at least one female founder securing 17.2% of venture capital for the first half of 2022. Moreover, 14% of unicorn startups in 2021 boasted female founders or co-founders, showcasing the potential for women-led businesses to reach extraordinary heights.
Navigating the Funding Landscape
While women entrepreneurs are making strides in various sectors, the funding landscape remains a critical aspect of their journey. From business grants to traditional funding avenues, understanding how women-led companies secure the necessary capital is essential. Surprisingly, only 27% of women seek some form of financing for their businesses, highlighting the need for increased awareness and support. However, a significant 62.3% of women business owners sought financing in 2020 to meet growing operating expenses, emphasizing the financial challenges they face.
Despite facing hurdles, women-founded startups display resilience and financial acumen. They receive less than half the funding compared to startups founded by men yet generate 10% more income over a five-year period. However, the struggle is evident, with 73% of women entrepreneurs experiencing difficulties in obtaining funding, and only 32% of those who apply being approved.
The Strength of Small Business Owners
In the grand tapestry of women entrepreneurship, small business owners weave an essential thread. On average, women small business owners are 42 years old, having been in business for 11 years, with a household income of $110,000 or more. They constitute 39% of small businesses operating across the United States, making significant contributions to the nation’s economic fabric. However, the challenges faced by small business owners, especially during the COVID-19 pandemic, are evident. Female-owned small businesses were 7% more likely to close than their male counterparts, reflecting the resilience required to navigate unprecedented times.
A Bright Future for Women Entrepreneurs
Despite the challenges, women entrepreneurs are supporting each other, with 32% citing fellow small business owners as the most beneficial resource for navigating the pandemic. An impressive 66% of women business owners are the sole proprietors of their companies, further highlighting their independence and self-reliance.
The statistics paint a vivid picture of the remarkable journey women entrepreneurs have embarked on. From owning businesses that contribute significantly to the U.S. economy to breaking barriers in the startup world, women are leaving an indelible mark. Therefore, whether you are a woman contemplating starting your own business or seeking support for an existing venture, we encourage you to start now by searching for resources within your community. Take advantage of the mentorship opportunities and business guidance services that are readily available for your business to thrive.
Resource for statistics: https://bizee.com/blog/women-in-business-statistics