Starting your own business is a career path that, for many, signifies ultimate success. It is a path of problem-solving, grit, and -- perhaps most appealing -- ultimately being your own boss. While this lifestyle is widely admired, women have historically been far less likely than men to pursue it. There has been some progress in this area; over the past two decades, the number of women-owned firms in the US has increased 114%. In the past five years, the number of women-owned businesses increased 21% while all businesses only increased 9%. But even with this immense growth, women make up half of the labor force and still own only 42% of companies in the US.
Even in this modern age, when women are more likely than men to attain a postsecondary degree (women earn 57.4% of Bachelor's degrees and 58.4% of Master's), females are underrepresented in the entrepreneurial space. As a company with a proud female founder, we feel passionately that women should understand why this is happening -- and how they can break through the glass ceiling in spite of it.
The Cyclical Nature of Entrepreneurship
People do what they see people like themselves doing. It’s a tale as old as time, shaping our social circles, politics, neighborhoods and professions. This is called homophily, or love of the same. In the entrepreneurial space, this contributes to the gender gap because people with entrepreneurial experience, who have historically been men, tend to mentor and financially support people like themselves -- aka, more men. Women are thus less likely to consider entrepreneurship as a feasible career path because they don’t see other women entrepreneurs as role models.
Around the world, this cyclical issue can be seen even more prominently. Our very own Girl Up ambassador Anagaby Litz, who grew up in Mexico, says that her education taught her “that professions have a gender. Women are nothing more than synonyms for ‘mother’ and women who take alternate paths are often seen as ‘too ambitious.’” This mindset doesn’t just discourage young women like Anagaby from considering an entrepreneurial future, but contributes to the cycle by ostracizing even successful female founders from the entrepreneurial space.
So what to do? Find real life examples of those who are already breaking the mold. Listen to podcasts, read books and connect with entrepreneurs who are already doing “it” in the industry. LinkedIn is a great tool for outreach and you’d be surprised how many founders are willing to share their journeys and advice. You can also find mentors through score.org, which is a network of volunteer mentors.
The Confidence Factor
Overconfidence is the biggest psychological predictor of whether or not you’re going to become an entrepreneur. Because entrepreneurial endeavors often fail, entrepreneurs have to believe in their pitch, and themselves, wholeheartedly. Interestingly, several studies have shown that women have lower levels of hubris (aka classic Greek mythology confidence) than men. And, further, women are less likely to make the fundamental attribution error -- the belief that when things go right, it’s because of something you did, and when things go wrong, it’s because of external forces. Men appear to be much more prone to the fundamental attribution error, while women tend to have a more accurate judgment of risk.
So what to do? This psychological factor can’t be totally remedied, but luckily, there are resources to help women believe in themselves and their business idea. Sheila Lirio Marcelo, founder of Care.com, advises women entrepreneurs to develop thicker skin. “Entrepreneurs are made or broken by how they bounce back from adversity.” In other words, if you’re a female entrepreneur who has faced rejection in the past, learn to shake it off and keep pushing forward -- men do it all the time.
Access to Financial Resources
Remember that thing called homophily? Well it doesn’t just affect how many women are interested in pursuing an entrepreneurial career -- it also affects access to funding. A staggering 91% of venture capitalists are male, and thus their networks are mostly male. These major sources of funding are not seeing as many women’s projects nor hearing about as many successful female entrepreneurs. This contributes directly to the fact that 91% of venture-backed entrepreneurs are men.
So what to do? Across the US, there are organizations and grants available to help with financing. Here you can find a variety of programs to help you get started, from early-stage fund investors to generous grants. If you’re already in business, apply to be woman-owned certified which can give you unique access to programs, business opportunities, mentoring and networking.
In the past few years, women have begun claiming their rightful seats in the entrepreneurial space. But clearly, there are still many barriers to success in this male-dominant world. We hope that having this knowledge empowers you to build your own path of success, find powerful allies and resources and most importantly, inspire the next generation of young women to confidently say “when I grow up, I want to be a female entrepreneur.”