An Insider Perspective from NWBC’s Research Analyst 

By Miriam Segal, Research Analyst

Note on statistics


I’m a huge fan of statistics. Ask anyone I work with. But if I could only say one thing about statistics, it’s that they are not particularly useful for predicting the performance of one observation—that is, one person, one family, one women-owned business, etc.  This is particularly important to remember in regards to quantitative research on women-owned businesses, such as the report the NWBC recently released on access to capital among high-growth women-owned businesses.


It is not necessarily effective to make individual business decisions based on what’s right for the “average” business.  What’s right for you and your business is what’s right for you and your business. With this in mind, I’m going to take a closer look at several of the research findings and what they could mean.


Team Ownership


As the report shows, women were more likely to be solo owners—even among the most successful firms. Anecdotally, women business owners may have a tendency to want to do everything themselves and stay in control of their businesses’ futures. For both men- and women-owned firms in the study, team ownership had a positive causal relationship on the amount of financial capital used. Several hypothetical explanations for this increase are:

  • Social capital, which can be a means of accessing financial capital, increases with the addition of team member/owners.
  • Investors may be more likely to fund a team, knowing that it is more difficult for one person to scale a company.

Regardless of these suggestions, firms with team ownership used more capital than single-owner firms, all else equal. As business owner and NWBC member Laura Yamanaka says on running a business, “It takes a village. No one does it by themselves.”


However, plenty of single-owner firms are successful. Jaime Nack, also a business owner and NWBC member, mentions that it can be difficult to find a suitable business partner.  In these cases, potential entrepreneurs shouldn’t let lack of a business partner be an obstacle.


Intellectual Property


All else equal, having intellectual property had a statistically significant positive impact on the amount of outsider equity received from 2004-2009*. However, this effect was positive but mostly insignificant for total capital.


When looking at baseline characteristics of firms, an interesting trend emerges. For women-owned firms, those that were ultimately the most successful were the least likely to have intellectual property initially. For men-owned firms, the opposite is true.


Descriptive statistics: percent of firms with intellectual property
                         All firms     High growth firms     Top 25 firms
Female           18.2%         17.3%                              9.2%
Male                19.9%         27.1%                             44.5%
Source: Table 3, Robb and Coleman (13).

This data asks more questions than it offers answers. For example, intellectual property can indicate a patent, copyright, or trademark. (A 2011 NWBC report showed that women have higher participation in trademark than patent activity.) And there’s the issue of statistical significance of the differences in this table.


But in any case, any kind of intellectual property is associated with an increase in equity capital, all else equal. This isn’t so say that firms that don’t have intellectual property are doomed to undercapitalization. Outsider equity is a particularly important issue among firms with intellectual property since that banks generally do not accept intellectual property as collateral for a loan, making outsider debt hard to come by.  (For what it’s worth, having intellectual property had a mildly negative and statistically significant on the ratio of outside debt to total financial capital a firm used in several years.) It’s true that outsider equity accounts for a large difference in total financial capital between men and women. But that doesn’t mean that getting equity capital is the difference between the success and mediocrity for an individual women-owned firm.


Intellectual Property & Future NWBC Research


As an aside, this brings up the question of women’s commercialization of research, particularly in STEM fields. For example, a 2008 working paper by Ding, et al. found that women life scientists patent at only 40% of the rate of equivalent male scientists (p<0.001). There is limited research available the topic, so we’ve added it to the NWBC’s research agenda.



Survival (and other) bias


We know from the report that the most successful firms used massive amounts of capital.  What about the firms that used massive amounts of capital and then went out of business, assuming they exist? As mentioned in the report summary, it’s generally difficult to address survival bias with data on businesses. However, another NWBC research project on access to capital coming out this fall will take a stab at tackling this issue.


If an entrepreneur invests a lot of money into a business, failure (defined as going out of business) is a particularly unattractive outcome. For example, if you take out a business loan for $500,000 and spend that money on equipment, you’re probably going to take your business very seriously. On the other hand, if you throw $2000 into a consulting business on the side, you have less to lose from business failure. This might sound a lot like the sunk cost fallacy, except that sunk costs refer to unrecoverable expenses. And sometimes, the difference between recoverable and unrecoverable is commitment and persistence.


* The report examines the log of the amount of outsider equity.




Ding, Waverly W. and Murray, Fiona and Stuart, Toby, Gender Differences in Patenting in the Academic Life Sciences (2006). Available at SSRN: or