Women are strong and fierce and they can excel in any field they want to. Olympic badminton gold medallist Carolina Marin, New Zealand PM Jacinda Ardern, Oscar winner 2021 Frances McDormand are all models of this strength. It is, therefore, no surprise that women are brilliant entrepreneurs as well. Bumble CEO Whitney Wolfe Herd, self-made entrepreneur Oprah Winfrey are true inspirations for men and women alike in the world of entrepreneurship and business.
Entrepreneurial ventures are a significant driver of the economy as they contribute to jobs, fuel innovation, and increase productivity. And yet, women only raise just 2% of venture capital dollars and their company valuations also remain lower than those run by men. It is common knowledge that women face many more obstacles and roadblocks in their professional or entrepreneurial journey than men. Even though the landscape is changing gradually and promisingly for female entrepreneurs, there is a long way to go to ensure equality in opportunities and income.
In this article, we dive into the evolution and current state of women entrepreneurship, focusing on the United States of America.
History of women entrepreneurship
Without influential female entrepreneurs, today’s multi-billion-dollar companies and workplaces would not be the same. History is witness to how women have traversed through the roles of homemakers to self-made business owners. They have made their mark with their innovations, out-of-the-box business ventures and perseverance.
Before the 20th century, American women usually entered the business if only it were a dire necessity, i.e., they became widows, or their husbands refused to earn for the family. These businesses mainly included farming, brothels, bakeries or alehouses. It was only at the beginning of the 20th century that feminism started to sow its seeds, bringing a change in the female working environment.
In the early 1900s, female entrepreneurs such as Madam C.J. Walker, Ma Perkins, Elizabeth Arden, Olive Ann Beech got a kick start to their successful entrepreneurial careers. In the second half of the 20th-century, names like Ruth Handler, Brownie Wise and Oprah Winfrey became household names in the US. They established their brands and fought bec et ongles to climb the success ladder while facing gender and racial discrimination, unfair wages, and stigmas plaguing female business owners.
Let’s have a look at the legacies of some of them –
1. Madam C.J. Walker: One of the most successful women entrepreneurs of the 20th century, Madam C.J. Walker was orphaned at 7. In 1905, she created Madam Walker’s Wonderful Hair Grower, a scalp conditioning and healing formula, as she suffered from a scalp ailment. Walker built her empire out of nothing. She expanded her business to Central America and the Caribbean. She has inspired many women entrepreneurs and became a role model for the African-American hair-care and cosmetics industry and the African-American community.
2. Elizabeth Arden: Elizabeth Arden moved to New York City to pursue her dream of building a cosmetics line at 30. She opened the first Red Door salon on Fifth Avenue in 1910. Her products were meant to improve the skin instead of hiding the blemishes. Her cosmetics were created with a scientific approach to skincare. She also developed products that women but desired, such as red lipstick. She introduced the concept of eye makeup to American women and created the idea of a makeover.
3. Ruth Handler: The beloved Barbie doll has been ruling the toy industry since Ruth Handler created it in 1959. She changed the way little girls play and dream, leaving a stamp on the American culture. She debuted Barbie at a New York toy fair in 1959. Handler and her husband, Elliot, used to sell dollhouse furniture and other toys through their company, Mattel. Within five years after the launch of Barbie, Mattel became a Fortune 500 company. Today, Barbie brings in more than US$ 1 billion a year for Mattel.
4. Oprah Winfrey: Oprah Winfrey is called the media queen. Born in Kosciusko, Mississippi, in 1954, she lived in poverty in her childhood. She got her big break in 1983 when she began hosting a morning talk show. Within a few months, The Oprah Winfrey Show became the highest-rated talk show in Chicago and her career skyrocketed. Today she is a Billionaire media executive and philanthropist and comes under America’s wealthiest female entrepreneurs list. She won the Cecil B. DeMille Award (Golden Globe for lifetime achievement) in 2018.
The American feminist movement has broken barriers for women as they have earned legal rights in America and many other progressive countries. Their success is not limited to any particular industry but can be found across the entire business sphere.
Women-owned business statistics – The US
Between 2014 and 2019, the number of women-owned businesses in the US rose to 21%, nearly 13 million. Employment grew by 8% to 9.4 million and revenue rose 21% to US$ 1.9 trillion. In the same period, the growth rate of the number of women-owned companies was 3.9% annually, which is significantly more than the growth rate of all businesses during the period (1.7% annual growth). While the number of women-owned businesses grew 21% from 2014 to 2019, firms owned by women of colour grew at double that rate – 43%. Women of colour founded 70% of new companies in the US.
The above statistics might seem to be optimistic, but the scenario is not all roses. Out of all entrepreneurs across the US, only 25% of them are women entrepreneurs. Men still have the upper hand in the US states when it comes to founding startups. On a global scale, out of all the women-led companies in the, only 2% generate more than US$ 1 million.
Gender Gap in entrepreneurship
There is a wide gender gap in entrepreneurship that has to be addressed with urgency. Women-led startups often pay higher interest rates and take on more collateral as compared to similar male-owned startups. A study found that investors tend to ask different questions based on gender unconsciously. For example, they will ask men – “how will you win?” and ask women – “how will you not lose?” when gauging the success of an idea. Female founders get significantly less Venture Capital funding than their male counterparts.
In an interview conducted by VCBay, the founder and CEO of the New York-based SaaS startup Lately AI – Kate Bradley Chernis, opened up about how a male investor mistreated her in a meeting. “When I started to pitch my company, he didn’t even listen to me and fell asleep twice. He insulted me in front of other people in the room by comparing me to his daughter. I knew right away that I am not getting any money out of this guy. In the end, I just said to him that you can be helpful by not doing this to anybody ever.”
People have many misperceptions regarding women entrepreneurs’ competency and market knowledge, including the market opportunities that they identify. These have to be busted to make a level playing field for both genders to prosper in the business world.
Overcoming the Challenges
Female entrepreneurs worldwide face wage and gender discrimination and much fewer opportunities than their male counterparts do. Yet, they make a significant impact in every field: media, business, politics, sports, and more. To ensure that the growth of women-led ventures is not hampered, innovative policies and programs have to be deployed. Six initiatives for boosting women entrepreneurship are –
· Address women’s business issues
· Women-centred networking initiatives
· Business management assistance and support like training, counselling, strategy development.
· Access to contracts
· Personal and leadership development through mentorship
· Access to funding sources
The upsurge of successful women entrepreneurs in the 21st century should act as a realization of the economic potential of women-led businesses. Many changes and new policies would be required to realise the full potential, like family leave, affordable childcare, training and access to capital and markets among many others. Complex factors such as gender, race, ethnicity, generation and origin should not hinder the entrepreneurial path of women. Eliminating the barriers that thwart women-owned businesses from treading forward can spur innovation and strengthen the economy by creating jobs, bringing equality, and increasing citizens’ wealth.
For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.
We try our best to fact check and bring the best, well-researched and non-plagiarized content to you. Please let us know
-if there are any discrepancies in any of our published stories,
-how we can improve,
-what stories you would like us to cover and what information you are looking for, in the comments section below or through our contact form! We look forward to your feedback and thank you for stopping by!