Growing Women Entrepreneurs in LAC

At a recent event in their Washington DC headquarters, the Inter-American Development Bank’s Multilateral Investment Fund showcased the results of a new survey conducted among high-growth women entrepreneurs in Latin America and the Caribbean (LAC).
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Undertaken in concert with Ernst & Young, the study, WEGRow: Unlocking the Growth Potential of Women Entrepreneurs in Latin America and the Caribbean, utilizes a blend of qualitative and quantitative methods, focuses on nine countries (Argentina, Brazil, Chile, Columbia, Costa Rica, Jamaica, Mexico, Peru, and Uruguay), and explores the issue of what makes high-growth women entrepreneurs tick. High-growth in this case means that the firms in question have grown by 20% or more for at least the past three years.

What did the study find? Among other things that:

NWBC Publishes 2013 Annual Report

The National Women’s Business Council, a bipartisan women’s enterprise advisory body in the US established by the Women’s Business Ownership Act of 1988, has published their 2013 annual report to the President, US Congress, and the US Small Business Administration.
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The colorful 40-page report contains nine policy/program recommendations grouped within four pillars (Guess which one is our favorite!):

  1. Access to Capital
  2. Access to Markets
  3. Job Creation and Growth
  4. Data

Among the recommendations are two, in our view, worth calling out and commenting upon:

  • Implement an annual Survey of Business Owners model-based program.” The SBO is the Census Bureau’s quinquennial business census, which provides we womenablers with a mother-lode of invaluable statistics on the number and growth of women-owned firms. However, being quinquennial means that the data are only published every five years, and business moves much faster than that. Of course, Womenable and American Express OPEN have published an annual State of Women-Owned Businesses reports that provide estimates in between SBO reports (see a listing of these reports HERE), but more frequent government-published data would be extraordinarily useful. However, such an expansion of SBO is also very unlikely, given the expense required and the current state of the US budget. And yet, to paraphrase Robert Browning,

    “Ah, but a woman’s reach should exceed her grasp,
    Or what’s a heaven for?”

  • Increase the number of women-owned or -led firms participating in incubators and accelerators and consider establishing an accelerator and incubator program focused on women-owned or -led firms.” Womenable has long pointed out the need for paying much more attention to issues of growth and development of existing women-owned enterprises. This is another timely recommendation, but the NWBC missed an important opportunity to call out a key partnership in this endeavor: the Nation’s 100+ women’s business centers. Rather than trying to make existing incubators and business accelerators more female-friendly (good luck with that), we should expand the remit of and financial support for WBCs to offer growth-focused programming. Indeed, most of them already do – but they are doing so outside the “marching orders” provided to them by the SBA and Congress, which essentially puts WBCs in velvet handcuffs and says that all government funds can only go toward serving nascent firms and socially and economically disadvantaged populations.

The Council has done a good job of keeping the momentum going over a period – over the past three or more years, really – of staff and leadership turnover. There’s a new Chair in place, but no Executive Director at the moment. Despite that, they’ve published a report that’s well worth reading, and using for womenabling advocacy efforts in the United States and beyond. Keep up the good work, NWBC!

Silicon Valley Kerfuffle on Women in STEM

There’s been a bit of a flare-up in the blogosphere on the topic of (the lack of) women in technology/computer programming. A recent interview with the co-founder of the tech incubator Y Combinator, Paul Graham, is what set it off.
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Among other things, he said, “God knows what you would do to get 13 year old girls interested in computers. I would have to stop and think about that,” which has been interpreted a variety of ways: as yet another example of misogyny in the tech world … or as simply acknowledging the fact that there are a dearth of female programmers and female-founded tech companies.

The question, of course, is what to do about it. Will widening the narrow mindsets of venture capitalists be enough? We think not. It’ll take a combination of push and pull – of priming the pump with more STEM education and mentorship aimed at girls AND creating a more welcoming (or at least less hostile) environment in the post-secondary and start-up worlds.

Some of the great groups and initiatives that are doing their bit to open doors include:

As they say, it takes a village.

Women-Led Firms Venturing for Growth

As women entrepreneurs grow their enterprises, research has shown that they are less likely to seek and obtain equity investments, either from angel or venture capital investors. Some say women are less growth-oriented, some say their network ties don’t include the sources of referrals that are so important in this arena, and others point to a lack of interest or a bias in the equity capital community.Hand Holding Euro Notes

There are two new research studies shedding new light on this issue. The first, Venture Capital, Social Capital and the Funding of Women-led Businesses, published by the Small Business Administration’s Office of Advocacy, focuses on the venture capital industry, and finds that VC firms that network and invest together (thus sharing the risk) are more likely than those that go it alone to invest in women-led firms. Interestingly, firms that invest in women-led firms have a higher rate of return on their investment – which should show other firms that women-led firms may actually be a better investment or – at the very least – not as “risky” as they may presume.

The second analysis, “The Angel Investor Market in 2012: A Moderating Recovery Continues,” comes from the Center for Venture Research at the University of New Hampshire. Their analysis shows that, overall, there was a decline in the number of active angel investors in 2012 compared to 2011, but the size of their investments increased, for a net increase of 1.2% in the number of firms receiving angel capital investments. The share of angel investors who are women has increased significant: from 12% to 22% over that same period. And, perhaps not coincidentally, the share of women entrepreneurs selling capital also increased – from 16% to 25% of the firms tracked. And, while the number of women seeking angel capital is still low, when they receive an angel capital investment they top the average yield for investors by 4%. Here’s a good piece on Forbes.com about the study, featuring some insights from your truly.

Interestingly, angel capital is catching up may soon pass venture capital in their impact in the marketplace. In 2012, angel investments totaled $22.9 billion. A total of 268,160 investors made 67,030 deals. Conversely, while venture capital deals totaled $26.5 billion, that total was achieved by a much lower 3,698 deals. In addition, the value of  VC investments declined 10% in 2012 from the previous years, and the number of deals dropped by 6%. Will the more patient and personal angel investor soon top the more “take no prisoners” MO of the VC investor? Time will tell; the inflection point may come soon.

Another mano á mano form of equity investment is also gaining momentum. Crowdfunding is an avenue that more and more entrepreneurs are utilizing to raise outside capital – albeit at typically lower levels than angel or VC funding. And some say that this is an avenue that is becoming increasingly popular for women- and minority-owned firms.

As for the women entrepreneurs themselves, there are two successful NGOs that are helping women seeking equity investment to make the connections and talk the talk that will get them the deal: Astia and Springboard. Check them out.

And think that venture capital is only for single bottom line companies? Think again; there are many social capital investment firms. Here are some useful tips for seeking equity capital if you have a social enterprise.

A New Measurement of Support for Women’s Entrepreneurship

The Womenabler has long lamented the lack of a business-enabling environment (BEE) assessment that takes the special challenges facing would-be and established women business owners into account. Traditional BEE assessments (such as The World Bank’s Doing Business indicators or the Heritage Foundation’s Index of Economic Freedom) are “gender-blind,” thus ignoring both the legal and cultural impediments that exist for women in many countries when they attempt to start or grow businesses. And, at the same time, gender equality indices (such as the World Economic Forum’s Global Gender Gap reports, the Economist Intelligence female figure on map of EuropeUnit’s Women’s Economic Opportunity Index, or the UN’s Gender Empowerment Measure) do not include entrepreneurial measures as among the factors assessed. And, interestingly, the top-ranked countries in each of these two distinct types of environmental assessments share exactly 0 countries in common. (See the paper, “Assessing Business-Enabling Environments: How Gender Changes the Equation,” presented by Womenable CEO Julie Weeks in 2011 at both an academic conference and a meeting of national policy institutions.)

Now, into the breach, comes an exciting new project: Gender-GEDI. Spearheaded by a team at George Mason University that also developed the Global Entrepreneurship and Development Index (hence GEDI), this new index insist of 30 evaluation factors, aggregated into 15 pillars and three main environmental elements: entrepreneurial environment, entrepreneurial eco-system and entrepreneurial aspirations. The pilot effort assessing the individual, institutional and legal environment for high-potential women’s entrepreneurship includes 17 countries – picked to represent a variety of regions and development contexts. Who came out on top? Here’s the list:

  1. United States
  2. Australia
  3. Germany
  4. France
  5. Mexico
  6. United Kingdom
  7. South Africa
  8. China
  9. Malaysia
  10. Russia
  11. Turkey
  12. Japan
  13. Morocco
  14. Brazil
  15. Egypt
  16. India
  17. Uganda

This new analysis was underwritten by Dell, and released today at their 4th annual Women’s Entrepreneur Network gathering in Istanbul, Turkey. Womenable was pleased to have played a role as an advisor on this effort, and we look forward to expanding the analysis to additional countries in the future (pending funding, of course!)

Click on these links to learn more about Gender-GEDI, a news release summary of the findings of this important new analysis, and to download and read the 22-page white paper.