I never felt oppressed because of my gender. When I’m writing a poem or drawing, I’m not a female; I’m an artist. —Patti Smith
Being in business for oneself is a dream that a lot of people have had, but for centuries, conventional wisdom held that men were the safer bet for investors. Being born female automatically put one at a severe disadvantage in the business world. Even now, for all the positive strides that women have made, venture capitalists still prefer to put their money on all-male teams. Call it the good-old-boys network or outright chauvinism, being female and trying to run your own business is more than a bit challenging.
Opinions may soon change, though, after a 10-year study by venture capital firm First Round has shown that many of those old, prevailing concepts of what makes a new business a good investment are just plain wrong. Being young isn’t bad, and being a female is actually a blessing. So much so that new business with at least one female on the management team out-performed traditional all-male teams by a whopping SIXTY-THREE PERCENT! In terms of business statistics, that number is huge! Combine that with the same research showing that having a founder under the age of 25 increases performance by thirty percent and we’re starting to wonder why every new business isn’t being fronted by young women!
The results of the study were first assimilated into a non-academic structure by the Harvard Business Review and should, hopefully, not only encourage investors to put more money into businesses started by women, but should also encourage more women, especially young women, to not hesitate to put that business plan together sooner rather than later. We’ve already seen that having a female at the front of the business is more likely to result in a successful Kickstarter campaign. Successful categories for women include technology, fashion, and games, but across the board, women beat all-male startups every time.
Perhaps the big question here is why we’re so surprised by these findings (and, universally speaking, we are)? Women have been running operations with complex financing and investment structures for thousands of years; they’re called homes. To claim that there’s no parallel between making a home successful and doing the same for a business is naïve and ignorant. Moreover, women have proven themselves more than capable of leading armies, running countries, and heading up Fortune 500 companies while still taking care of children and keeping their families in tact. Good luck finding a man who can pull off the same tasks with as much gracefulness.
Numbers compiled about this same time last year show that female entrepreneurship is on the rise. The number of funded startups with at least one woman on the management team doubled between 2009-2014. Still, that only accounted for eighteen percent of the whole, significantly low for the size of the whole picture. Women not only find it more difficult to secure VC financing for their companies, they have more difficulty gaining support from friends and family, especially in traditionally conservative areas of the country, such as the deep South and the Midwest. There are still too many people who challenge a woman with silly questions such as, “How are you going to balance both a business and a family?” or, “Does this mean you’re not going to have children?” That nonsense just needs to stop.
One possible area of concern, though, is that the same First Round study shows that where one goes to school does actually seem to matter. Specifically, startups did better when at least one member of the management team had attended an “elite” school, ie., anything in the Ivy League, Stanford, or MIT. That factor creates a significant challenge for any entrepreneur, but especially for women who cannot count on the legacy factor to get them into those schools. With rising education costs continuing to bring into question the value of a college degree, justifying the expense of going to an elite school over state schools with national standings in specific fields becomes a more difficult argument. Is it worth having a diploma from Harvard just to get funding for a business?
There are a lot of factors that go into making a startup work, though, and part of the reason for having a management team rather than trying to do it all on one’s own is that a diverse team spreads out those qualifications and experiences so that one doesn’t have to stretch to be perfect in everything. One of the dichotomies of the study is that, while startups with founders under the age of 25, having work experience at a top tech company is also an important factor. How is one supposed to go to college, get experience at a top tech company, and still start a company by the time one turns 25? I suppose if one graduates high school at 16 or something along those lines, it might theoretically be possible, but that is still a lot to ask of one person. Utilizing the skills and experiences of a team keeps the pressure from landing on the shoulders of one person.
What we do learn from this research, though, is that the time for young women to be starting their own business is now. The concept of waiting until one has several years of experience under their belt has proven to be ineffective. If you have an idea, do the research, write a solid business plan, and assemble a strong management team. Get yourself out there and do things. All the evidence points toward unprecedented success.
Go. Do it. Make yourself proud!