Kelly Northridge, MBA, MPH
I was asked to write an article outlining the funding barriers that directly impact many women starting businesses. This is a topic I know well, as I have been directly affected by it, and I have also studied it for the last five years at Oxford.
While the statistics and stories about funding and women can be unnerving (and our region is not immune) — more on that later — positive change has been quietly happening in our community. With interest growing and support of these changes expanding, our region is positioned to play a significant leadership role in the national narrative.
A few members of our community have been actively examining gaps, addressing issues, and expanding opportunities related to the funding and support of women-owned businesses (Girlmade, UNR, and EDAWN to name a few). We are in the beginning stages of an impactful change, and I encourage everyone in our community to join in the journey.
Supporting women’s entrepreneurship
Following is a list of elements that have been found in several studies to support women’s entrepreneurship and access to capital, as well as a few additional items that I have found yield added success in our area.
Balance: It is important for everyone to see themselves in the success of others. This translates to consciously ensuring balance in all activities surrounding entrepreneurship and funding with balance: speakers, panelists, founder spotlights, investors, funding review panels, etc.
Peer Support: It is important to create a peer network of support for women entrepreneurs wherein founders feel held, heard, and supported through the ups and downs. A great example of this in our region is Girlmade’s Brekkie for Bosses.
Mentorship: Women who have mentors achieve higher success. A community that trains mentors of all genders results in a powerful tool for advancing women-owned businesses, expanding access to capital, and connecting networks.
Inclusion: First, examine your applications (for funding or otherwise) for unconscious biases — hint: all applications have them — and change the wording for inclusion. Second, have your team complete unconscious bias training — insights lead to inclusion. Third, create more gender inclusive events — examine who, what, where, and when you offer events — do any of those answers cause women to self-exclude?
Capital: It is important to offer a variety of funding options that are readily available to both high-growth and normal-growth companies. This starts with you - start investing in the change you wish to see by supporting investment opportunities that are inclusive (such as the Audacity Fund Reno).
Why do we even need to work on these elements? The statistics. The Equal Pay and #MeToo movements have opened discussions highlighting the barriers women face when it comes to financing their businesses.
Pitchbook recently reported that last year, just 4.4 percent of all venture capital deals went to women-led start-ups, equaling just 2 percent of total venture capital funding dollars.
As reported in the recently released book Rising Capital, when women do seek to raise money for their start-up they raise 80 percent less than men in similar fields.
The cost of raising those dollars can be high — a First Round Capital study found that 78 percent of women raising money have been sexually assaulted or harassed during the course of funding discussions.
These statistics support why many women business owners do not seek out and do not try to obtain outside capital for their businesses.
Why do these statistics persist? A recent Oxford study has debunked the myth that “there are no women in which to invest”— rather, investors need to become aware of their unconscious biases and expand their networks.
As noted in a 2018 study by the National Women’s Business Council, women starting business “are often tied to an unconscious association with less credibility and a lack of legitimacy.”
This unconscious association was shown in a Harvard study to result in funders asking women questions related to “prevention” or how they will defend and support their strategy and prevent failure versus funders asking men “promotion” questions on growth, and future vision.
These unconscious biases help form various realities — as shown in a Kauffman Foundation study, women begin their businesses with less than half the amount of funds available as men, and yet are demerited for not growing as fast as male-led companies.
Our region is not immune to these statistics and biases. But others and I have been actively working to change the conversation over the past several years. In turn, our region is positioning itself to play a leading role in changing the way we support our female entrepreneurs.
We still have a way to go, but by having these conversations, supporting and talking about our organizational initiatives, and reporting out about successes and failures, we will be the leader for other communities to follow.
Kelly Northridge, MBA, MPH is the Managing Partner of Thomas Lillie Ventures, and is completing her Doctorate focused on Investing in Women from the University of Oxford. Kelly advises several start-ups in Northern Nevada and consults with the IFC, World Bank, and both large and small companies on change management, operations, inclusion, unconscious bias, gender lens investing and expanding funding opportunities for women.
