Last week we hosted our 3rd Public Meeting and panel this year titled, “Spreading the Wealth: Getting Venture Capital to Women.” Our Presidentially-appointed Chair Carla Harris kicked us off by reminding us that the NWBC is a non-partisan federal advisory council created to serve as an independent source of advice and counsel to the President, Congress, and the U.S. Small Business Administration on issues of impact and importance to aspiring and current women business owners and leaders. It is the Council’s job to equip the nation’s decision makers, public and private, with policy recommendations that will impact and improve the business climate for women in our country. We do this by producing best-in-class research on the most relevant issues facing current and aspiring women business owners and leaders. Our hope is to use compelling and rigorous research to incite action and build bridges to support women’s entrepreneurial ambitions and endeavors.
We believe data is the foundation and from that we can make the most effective interventions and recommendations to our primary customers. Accordingly, the Council had early access to the US Census Bureau’s Survey of Business Owners. The SBO is the only comprehensive, regularly collected source of information on selected economic and demographic characteristics for businesses and business owners by gender, ethnicity, race, and veteran status. The data are compiled by combining data collected on businesses and business owners in the SBO with data collected on the main economic census and administrative records. Data have been collected every 5 years since 1972, for years ending in “2” and “7” as part of the economic census. The program began as a special project for minority-owned businesses in 1969 and was incorporated into the economic census in 1972 along with the Survey of Women-Owned Businesses.
The Census released the preliminary data from the 2012 survey just last month, and I am pleased to report that the numbers are even better than expected. Women’s entrepreneurship is growing and getting stronger.
A few highlights:
- In 2007, there were 7.8 million women-owned businesses in the United States, which was a 20.1% increase from the period 2002 to 2007. As of 2012, there are 9.9 million women-owned businesses, reflecting a 27.5% increase from 2007 to 2012.
- Women-owned firms currently make up 36.2% of all nonfarm businesses. That’s up from 29.6% in 2007.
- Women-owned businesses generated 1.6 trillion in total receipts, up from 1.2 trillion in 2007, which is an increase of 35%. In comparison, male-owned businesses saw an increase of 33%.
- There are 89.4% of all women-owned firms with no employees but the owner.
- In terms of employment, 10.6 % of all women-owned firms are employer firms, a slightly smaller proportion than 2007, but still these firms accounted for an increase of 143,000 women-owned employer firms in the 5 year period.
- These women-owned employer firms employ 8.9 million people with receipts of $1.4 trillion.
- The increase in employees of women-owned firms is an increase of 19.5%; for comparison, the increase in men-owned businesses was only 11.5%.
- We’re looking at 2.1 million more women-owned businesses in 2012 than 2007 and almost 1.5 million more jobs since 2007!
- Based on our conversations and convening with women business owners, we are not surprised by these numbers. What we know through our research and what we have observed around the country is that women business owners are committed, talented and invested in their community and are taking advantage of the “perfect storm” for entrepreneurship right now, including low interest rates, a diversity of capital, emerging resources and local support, and more.
- While there is much to celebrate – we are still far from parity in numbers of business and revenue. As such, our hope is to use this numbers to affirm the importance of investing in women and identify opportunities for policy recommendations that will continue to stimulate business growth for women entrepreneurs so women entrepreneurs can successfully start and grow their firms.
With this new SBO data, the Council focused specifically on synthesizing the numbers regarding women business owners to create and release a new set of fact sheets. We know how hard it can be to read raw data so be sure to go to nwbc.gov and check out our updated fact sheets.
We are not the only ones excited about the new SBO numbers. The data release was featured in CNN, Fortune, the Wall Street Journal, Forbes and Fast Company. The press was interested in the rate of growth, but also the growth of black and Latina women-owned businesses. Just last week, Amanda, the Executive Director, and I were on Huffington Post Live to talk about the growth in minority women-owned businesses. We are thrilled to see the media taking an interest in women’s entrepreneurship. We firmly believe that the more we share data and examples we see of successful women entrepreneurs in the media, the more policy makers will respond, the more women will take the leap, and the more the investment community to support women-owned businesses. Thank you to those journalists that are shining a spotlight on women business ownership.
If you would like to get more details on the numbers we’re looking at on the fact sheets visit: http://www.census.gov/econ/sbo/. Once the final dataset is released, which we hope will be early 2016, the Council will also be starting a comprehensive, longitudinal review of trends in women business ownership from 2002 to 2012.
We also shared information on our two newest research projects: Structural Differences of Women’s and Men’s Social Networks and Undercapitalization as a Contributing Factor to Business Failure. Please check the corresponding links for the executive summary, key findings and the study.
Finally, we shared our research agenda for 2016 which includes a high growth women’s entrepreneurship resource platform. We are pleased to report that if all goes well, the platform will be launched next year and serve as a resource of valuable information and guidance for women entrepreneurs seeking to grow and scale their businesses. Our plan is to collate and curate the information needed by high growth women entrepreneurs and map them to the many resources available organized by the stages of the business cycle.
Through conversations and meetings with a variety of resource partners and women business owners, we realized there was a gap in way information available was organized allowing women to move quickly on tapping into those resources according to where they are in their growth stage. If the resource information is at their fingertips and organized for easy access we are confident that it will be an asset to women and allow for the growth and scale that we all want. An easy to use platform that functions as a data repository for relevant tactical resources on how to ideate, launch, grow and scale your business. It sounds like a good idea to us.
Another project includes an in-depth look at Black Women Entrepreneurs in partnership with the SBA Office of Advocacy. The goal of this programming is three fold: First, to recognize and explore challenges and opportunities specific to black women entrepreneurs and business owners; Second, to encourage dialogue amongst black women entrepreneurs & business owners, thought leaders, policy makers, and other stakeholders; on what is working and how it can work better, and third, work within breakout groups to identify policies and recommendations that will foster the growth and survival of black women entrepreneurs and business owners.
We are also looking at regional ecosystems to identify what is working well and where. We have found in our travels around the country meeting with women in different places, such as Detroit and Austin, that there are vibrant local ecosystems and we want to find out a) what are the conditions for their success and b) what are opportunities that are needed for additional support.
And finally, we announced our work building on our previous work with the Survey of Business Owners, we have commissioned a project with Womenable to do a deeper dive into the final dataset, which again we anticipate will be complete in early 2016. This analysis will focus on the nuances, trends, and patterns of growth for women’s entrepreneurship since 2002.
Sole Source Authority and the WOSB Federal Contracting Program
In addition to all this exciting research, the Council also functions as a convener which is by far among our most important role and a clearing house to synthesize the variety of perspectives on policy that impacts women business owners and to coalesce that input into a plan and series of recommendations to our customers, the White House, Congress and the SBA. The Council has long called for sole source authority in the Women Owned Small Business Federal Contracting Program, as well as improvements to the certification processes and the program itself. You can read the Council’s full comment on this matter on our website.
In looking at our high growth women’s entrepreneurship resource platform, we applaud the progress made by the SBA with the exciting news shared this afternoon. This is a victory for women business owners as sole source authority is an important tool for both women-owned businesses and government agencies; to both increase access to millions of dollars in contracts in the federal marketplace for women-owned businesses, and support government agencies in reaching the 5% procurement goal for women-owned businesses. Actions that will help women-owned businesses thrive, grow our economy, and create new job opportunities for more Americans should be placed high on the “to do” list for enhancing US competitiveness. Women can be instrumental to achieving this goal.
Engagement and Communications
We have indeed been hard at work convening people and engaging the press on our releases and other activity and we shared the following updates:
- First, in an effort to understand the many stakeholder perspectives on the WOSB-related provisions, the Council met with the Small Business Procurement Advisory Board in July to discuss the WOSB program and strategies for getting to the 5% goal. As you know, the federal government has yet to reach this goal; we must really think about what’s happening and where improvements can be made to make sure the doors are open to this contracts and further that women can secure them. We had a very constructive brainstorm session and look forward to engaging with this community even more. The Council values their insights, as they will certainly inform our policy recommendations.
- In partnership with the SBA Office of Women’s Business Ownership, hosted several of the women business organizations at the SBA in late July to share updates and discuss opportunities for collaboration. There are many of us that are in this movement and, as we know from all great movements, it is important to be in touch and strategically align to move the shared agenda forward. The SBA was well represented by Assistant Administrator for women’s business ownership Erin Andrew, senior advisor in the office of General Contracting Aditi Dussault, and Administrator Maria Contreras-Sweet. Most of the questions we discussed were related to the WOSB certification and ongoing conversation regarding sole source. It is no doubt top of mind for all of us.
- We announced that we have just completed our media resource for journalists and other media makers that want to more effectively cover women entrepreneurs. This resource will be out next month and includes tips on how to talk about women entrepreneurs, resources for how to interview women business owners and how to find women business owners. Spoiler alert for Women’s Small Business Ownership Month.
We then moved to our panel discussion on venture capital and women. We shared some statistics on the state of women and venture capital, including:
Our panelists were amazing:
- Jules Pieri, co-Founder and CEO of The Grommet, an entrepreneur-in-residence at Harvard Business School, and one of Fortune’s Most Powerful Women Entrepreneurs in 2013
- Julia Pimsleur, CEO of Little Pim, founder of Double Digit Academy, a bootcamp training for women planning to raise venture capital or an angel round of $500k+, and author of Million Dollar Women: The Essential Guide for Female Entrepreneurs Who Want to Go Big
- Jeanne M. Sullivan is an advisor, speaker, investor and connector and the co-Founder of StarVest Partners, a venture capital firm in NYC
- Trish Costello is the Founder and CEO of Portfolia, a collaborative equity investing platform. She is recognized internationally for her pioneering work in educating and preparing venture capital investment partners, through the prestigious Kauffman Fellows Program.
Some kernels of wisdom from each of our panelists included:
Jeanne launched us off with, “the gender bias we see in venture capital starts in grade school. When women get a bad grade in STEM – we give up, [internalize it, and take it as a sign that we’re not smart]. Boys think the teacher is dumb, and hit the books to prove them wrong. That is why it is so important for us build connections. Diversity does make a difference, because it improves innovation; we have a different lens through which we look. That’s why women-led companies are doing so well.”
Trish continued, “Five million women are accredited investors – either they make more than $200K or have $1 million in assets. Collectively, women own about $10 trillion in private investable assets. So when we look at these numbers if women just began to put a very small amount of investment wealth behind the [women-led] companies they want to see, we could greatly shift what is happening in entrepreneurship world.”
Julia chimed in with some goal setting, “We need 1 million more women that receive venture capital by 2020.”
Jules shared her insights on equity crowdfunding and angel investment, “Equity crowdfunding is great – but it’s not right for all companies. Angels like to move in packs – people like to invest alongside other people.”
Julia chimed in, “Angel investors aren’t risking their retirement–they have funds they will be investing regardless. Why shouldn’t their investment be in your company?”
Jeanne concluded, “Angels are all around you! The best angels are the people who already know you and have that existing relationship and can build on a strong foundation. Can you package what you’re doing to show them a compelling reason to invest?”
Finally, Julia shared, “Getting funds can take a long time. It’s very useful to have a system for keeping potential funders up-to-date with accomplishments so that your success can turn their ‘no’ into a ‘yes’.”
The panel was incredibly informative and we recommend you listen to the whole thing!
The Council is committed to producing research and engaging key stakeholders in alignment with our four pillar strategy: Data Collection, Access to Capital, Access to Markets, and Job Creation and Growth. Data is the foundation. The Council seeks to expand the quality and quantity of data on women-owned businesses, and we will continue to make progress in measuring the tide of women’s economic impact. Access to essential business assets – capital and markets – continues to be a challenge for too many women. Our work here focuses on changing the infrastructure, and increasing and improving the resources, so more women can access the capital they need to start and grow their businesses, and enter new and emerging marketplaces, which will help them grow even more.
Our goal is to ensure more women-owned and women-led businesses can scale and thus, create more jobs and help the continued growth and expansion of our economy. The work of the Council is grounded in an understanding that women have innovative ideas and that women are leaders. We know women are launching businesses that create value and solve problems. And we believe women with innovative and scalable ideas should be able to grow their businesses, increase their receipts and create more jobs; it’s good for the business, and good for the economy overall.