Originally published on Equities.com
This article is based in the USA although the learnings are interesting and could be used to ensure we do a better job in Africa.
On July 19-20, 1848, the first ever Seneca Falls Convention is launched to discuss the social, civil, and religious conditions of the rights of women. A seed was planted and a battle for equal rights for women in the United States initiated. Just 21 years later, two competing organizations were formed by perhaps the most notable suffragist leaders to live; one by Susan B. Anthony and Elizabeth Cody Stanton, the other by Lucy Stone. After years of rivalry, the organizations merged in 1890 with Susan B. Anthony as the leading force – the National American Women Suffrage Association (NAWSA) was born as the nation-wide movement feverishly progressed.
On April 18th, 1920, the 19th amendment is ratified, giving women the right to vote after decades of fighting, state-by-state. What exactly happened here? A movement was initiated, gained momentum, and continues today in 2017, stronger than ever. Advocates supporting equal women’s rights continued to break down regulations and societal norms, previously acting as barriers to restrain the rights of women in the United States. Nearly 100 years later, women in the United States are still facing very noticeable glass ceilings that prevent them from participating in equal opportunities with men.
Venture Capital and Women Leadership
Venture capitalists have long been known as sharks in the startup community due to their typical goal of 10x return on investment. This is understandable because VCs invest in higher-risk startups with the intention to disrupt market segments or entire markets. Hence the focus on technology in Silicon Valley. Startups in the pre-revenue stage are unlikely to be approved for large loans from banks, leaving VCs as sometimes the most viable option for entrepreneurs. Makes rational sense, expecting a 10x ROI is reasonable because a majority of their investments fail, but data suggests a darker picture … Fortune and TechCrunch report that among U.S. VC decision-makers, only 6% and 7% are female, respectively.
Consider the chart above. Firms with fewer than five employees consist of predominantly males and decreases to nearly half as the number of VC firm employees reaches 21 or more. Two genders, male-female, 50/50. Women don’t have the decision-making power to heavily influence who receives VC funding, but do women-led startups receive equal levels of investment capital?
Women-led Startups and Successful VC Funding
The short answer, no! In a 2016, Bloomberg reported statistics indicate that only 141 of the 2,005 startup founders receiving VC capital were female – that’s only 7%. The report continues to prove a major social barrier exists – companies founded by women received on average $77 million while startups led by men received $100 million. The cherry on top, women still receive only $0.79 to the man’s $1.00. Is there an alternative option that empowers females with an equal chance of raising capital?
Equity Crowdfunding and Women Entrepreneurship in the United States
Simply put, equity crowdfunding is a financial instrument empowering 240+ million regular U.S. citizens to acquire the necessary capital to embark on their entrepreneurial venture with less regulatory friction, lower costs, access to the non-accredited investor, and new financial instruments. Many financial professionals see crowdfunding as a mere tool of corporate finance used to build companies. I beg to differ. Crowdfunding is a revolutionary, multi-faceted tool used to empower everyday individuals to build communities around their dream, ultimately increasing their ability to reach their dreams.
One of my dreams is to inspire and empower others to reach their entrepreneurial goals without the friction of gender and racial prejudices. The community building aspect of crowdfunding enables the “small fry” to compete with some of the biggest. All it takes is one person with the confidence, work ethic, and communication skills to begin building an empire with the help of their loyal, passionate, and value-driven community of investors.
Sick of social barriers in business built on gender? Women, don’t be afraid to pursue your dream or support other women in reaching theirs. Men who empathize, don’t hesitate to provide guidance or support to women-led businesses. Now more than ever, you have the ability to be the change you wish to see in the world.