As small business owners, we sometimes feel a bit neglected in a world that seems to prefer big things: it seems like the tide is finally starting to turn, at least when it comes to recognizing the value and promise of women entrepreneurs.
A recent article in the Toronto Star about the SheEO Radical Generosity fund spells it out: the idea of women supporting women by paying it forward is creating a new model for sustainable economic development not by looking for “unicorns” (startups valued at >$1 billion), but rather by investing in small, women-led ventures.
The article profiles our Radical Generosity sister, Twenty-One Toys founder Ilana Ben-Ari, and extensively quotes SheEO founder Vicki Saunders, an experienced entrepreneur who started the new initiative as an antidote to the startling gender imbalance in venture funding. Ilana’s venture checks many of today’s buzzword boxes: it’s innovative, creative and disruptive, and yet she has had to personally bootstrap its entire startup.
Twenty-One Toys, Lunapads, Magnusmode, Skipper Ottos’s CSF and Abeego form the 2016 Top 5 cohort, and met in February to decide how the $500,000 fund was to be distributed among the group. We are now acting on our plans to grow our businesses, and anticipate collectively growing our revenue by $2.5 million in the next 12 months.
Why the women entrepreneur focus? Turns out that it’s about more than feminist politics: it’s what makes the most sense. Let’s take a look at some statistics that support the claim that today’s biggest and best opportunity for economic growth is companies that are, ironically, chronically underfunded.
Quoting from Vicki’s September 2015 Globe and Mail editorial: “98% of our economy is made up of small- and medium-sized businesses. Fewer than 1,200 companies in this country have more than 500 employees. Big is not the norm.
Investors don’t focus on supporting and growing small– and medium-sized businesses because they aren’t “sexy.” They don’t “scale.” They aren’t in “hot” markets. And they don’t get outsized returns. However, a loan to a solid business to hire a few more people to grow sales is far more sustainable and likely to have a return than betting it all on a new idea with an unproven entrepreneur in a crowded space.”
A February 2016 New York times article that details the experience of a woman entrepreneur’s trials trying to raise capital for her tech startup in Silicon Valley echoes Vicki’s position. A damning 2014 study published by the National Academy of Sciences cited in the article found that 68% of investors who listened to identical pitches delivered in male and female voices chose to finance the male-voiced pitch.
Vicki’s editorial concludes: “Last year, two-thirds of businesses in Canada were started by women. New data have emerged showing that if female entrepreneurs were financed to the same degree as their male counterparts, we’d create six million jobs in North America in the next five years. This is a huge economic engine we haven’t even tried to engage.”
One of the SheEO mantras is “The ladies are coming”: forget unicorns – let’s level the playing field for women entrepreneurs!