One of the most interesting findings was that women had lower expectations of their firms’ growth, but higher likelihood of actually growing at an accelerated pace. Forty-two percent of women-owned firms exceeded their growth expectations from 2008 to 2011, compared to 29% of men-owned firms. For me this called to mind the recent public discussions of confidence, and more specifically the Dunning-Kruger effect, which is that “the less competent people are, the more they overestimate their abilities.” It was not surprising to me to learn that women’s businesses experienced higher growth than they expected. When I informally previewed this research at the We Own It Summit in May, there was a murmur of resonation around the room. One of the panelists, a lending officer, said that she always approved the applications from women that came across her desk, because they were so meticulously put together. The applicants were so much harder on themselves than the banks would ever be.

Another interesting finding was on team ownership. Top-ranked men-owned firms were more likely to have team ownership than their women-owned counterparts. In 2011, 40 percent of Top 25 women-owned firms had only one owner, compared to 15 percent of their men-owned counterparts. Among this “elite” group, men-owned firms tended to employ more people. The threshold to being a Top 25 firm for women-owned firms was 9 employees, compared to 40 employees for men-owned firms. On one hand, cheers to all these women making it in to the Top 25 as the sole owner and leader of their firm. On the other hand, a firm with only one leader – as opposed to a team – is going to have a much more difficult time in scaling, as shown by the differences in numbers of people employed in men-owned and women-owned firms. Bringing on others to your leadership and ownership team is one of the most important decisions that a business owner faces.  Other research indicates that women are often uncomfortable about bringing others on because they don’t want to lose control of their rate of growth.

The third area I’d like to highlight is that of loan applications. Women were more likely to be discouraged from applying for loans due to fear of denial, particularly during the financial crisis of 2008-2010. This fear was somewhat justified: in 2008, women-owned firms were much more likely to have their loan applications denied than their men-owned counterparts. For me this raised a lot of questions about what exactly is happening here. Are there misperceptions around what happens when you are denied a loan? Are interactions with banks so discouraging that women are afraid of getting involved with that?

What are the next steps here? For NWBC, we are interested in doing follow-on research on the questions raised by this paper. There are two main buckets: women’s fear of loan application denial and more analysis on why women’s applications are denied. Is it a matter of more technical assistance? Are there structural factors at play? In addition to future research, NWBC will be having conversations with banks and community lenders to develop an understanding of the challenges they’re facing so we can make the right policy recommendations. We are also currently working on a toolkit about different sources of capital and how to think through using them. This – and more research on access to capital for high-growth entrepreneurs – will be released this fall.

For other players in the entrepreneurship ecosystem, the return on investment for programs focused on women entrepreneurs is high. Accelerators and incubators or funds focused on women-led or -owned businesses can help women get the experience that they need to scale. NWBC is pleased to have two council members participating as judges in the SBA’s Accelerator Competition, to highlight and feature accelerators doing great work in supporting women entrepreneurs.

Please send me your stories. Does this research resonate with you?