A lot has been said about the funding gap between male and female founders, but the root cause for the disparity is still up for debate. A new international survey suggests that the reason we see less women starting up is because they are more likely to start their business much later in life and have less access to funding.
These were among the findings from a poll of more than 1,700 entrepreneurs from the US, UK, Europe and Australia by the online graphic design marketplace 99designs.
The survey revealed that men are twice as likely to receive US$100,000 in investment. Women tend to start their entrepreneurial career later in life than men and they’re more likely to improve their skills through structured educational courses, while men reportedly do the same by reading business books.
Female entrepreneurs in the UK are more likely to secure financing than their counterparts in the US, Europe, or Australia. With the global average percentage of women business owners receiving a minimum $100,000 funding is 6 per cent (12 per cent for men), in the UK, this statistic is at a higher 11 per cent.
“With the venture capital sector remaining a male-dominated industry, the odds are already stacked against female entrepreneurs,” says Pam Webber, CMO at 99designs.“Women also tend to be more risk-calculating and going after that initial (seemingly) high seed might be daunting. Support from experienced female peers within the VC sphere may help to deter and overcome any fears of risk or existing gender bias.”
Why women start up later
One in five male entrepreneurs have started up when they were between 18 and 25 years of age, versus only 12 per cent of women. Of those entrepreneurs who began aged over 35, 43 per cent of women fell into this category, compared to 33 per cent of men.
“These patterns are most likely down to more women starting up an enterprise when their children have started school when they have more time to pursue a passion” Webber explains. “Returning to the corporate world still presents its challenges after extended maternity leave and the freedom of self-employment can be extremely beneficial.”
The study also revealed that nearly a fifth of women entrepreneurs spend over five hours a day with their family versus just 13 per cent of men The number of hours worked demonstrates the opposite trend, with 13 per cent of men working over 12 hours per day, versus 7 per cent of women.
“Of course deliberate family choices affect these patterns, but men still spend more time on paid work than women and women more on childcare and household chores. Gender roles are undoubtedly converging, but we are still seeing the same patterns reflected amongst those who have started their own entrepreneurial venture,” says Webber.
“Our survey as a whole has shown that women place more value on camaraderie and mentorship, and I think group learning provides this kind of support and positive reaffirmation,” she adds. “It is also a good way to network, which is another trait women listed as vital and one they commonly need to build to enable them to succeed.”
Why mentors matter
Only a minority of entrepreneurs use professional mentoring – globally only 8 per cent of men and 10 per cent of women. However British female entrepreneurs are more likely to seek help from a mentor than their male counterparts (14 per cent versus 11 per cent).
“Female entrepreneurs often struggle to get out of their comfort zone and so it’s great to see female entrepreneurs, especially in the UK, place more value on professional mentoring,” says Webber. “This is important for aspiring female business owners as reaching out to a mentor can provide the support needed for success.”
Nearly a quarter of women believe networking is the most important skill when starting a business (versus 19 per cent of men). According to Webber, research shows that women tend to have smaller professional networks than men, and many see their perceived weakness in this as an are to focus on.
“Despite the gender gap that our survey exposes, the encouraging news is that more and more women are taking up the entrepreneurial challenge. In the US the number of women owning their own business is up by 30 per cent – and since 2008 in the proportion of UK SMEs run mainly by women has increased from 14 per cent to 20 per cent,” Webber says.
“The challenge from here is to identify and understand the gender biases that might affect females starting businesses, and use this to support them and their male counterparts equally.”