Top to bottom, the default ways of doing business remain male. All-pervading male versions of leadership, organization and performance cover the range of business expectations and daily perceptions. That goes for funders and employees, customers and suppliers, business schools and media as well as entire industries that have yet to embrace top-down change. Unfortunately, male benchmarks and outlooks also are what women in business buy into as marks of success.
Yes, we've moved beyond the gross gender bias of the last century, although dozens of exceptions definitely prove the rule here. Some activists go so far as to label the last century the one that secured civil rights, while the 21st century will be all about the rights of women. But if so, remember how many years of history and unrest in the 20th century had to unfold before rights for people of color took on urgency. And the battles endure.
Consider that laws for women's rights have been on the books for nearly a century when it comes to voting and a half-century for mandating equal pay. Yet here we are: A scant minority of women in Congress; fewer than 5 percent women CEOs in the Fortune 500; and 78 cents to the male $1 on the job. Why is that? What's taking so long?
Girls Still Can't impress the boys
Cultural biases and conventions simply don't put "woman" and "entrepreneur" in the same space. The archetype remains tethered to the hunter male, a relentless warrior who vanquishes any and all unbelievers. Women continue to be seen by funders, and really the public at large, as newbies or juniors-in-training.
These widespread perceptions portray women as unable to risk or withstand the pressures, no matter how much evidence has mounted to the contrary. As a direct result, most women entrepreneurs do not attract the moneymen -- and make no mistake, funders are overwhelmingly male. About 75 percent of the country's nearly 317,000 angel investors are men, according to the Center for Venture Research. That jumps to more than nine out of 10 (94 percent) male for decision-making partners in venture capital firms, according to the Babson College Diana Project.
In raising funds during the first year of a startup's operation, on average, men "raised about 80 percent more capital than women did," reports the Kauffman Foundation. Women's blocked access to funding clearly caps their prospects, even when they run tech ventures that typically attract investors. There's no question that many women owners need to step up and assume more risk and more ownership of business financials. But it's equally unquestionable that responses to women's funding requests continue to evidence gender bias and limit women owners' potential. "When women do want to scale up, they don't get the funding they need, from both a venture capital standpoint and a banking standpoint," says Northeastern management professor Jamie Ladge.
Entrenched stereotypes drive inequities
In 2014, Ladge and her team researched nationwide bank funding for men- and women-owned firms, choosing companies that were similarly sized and had been operating for similar lengths of time. The researchers also controlled for profitability and the amount of time and personal capital owners committed to the business. "Not surprisingly," says Ladge, "we found that women received less money even when they could show all the same measures of success as the men-owned firms.... We gathered that what's driving these inequities for women are deeply entrenched stereotypes."
Established loan channels continue to ignore the needs of women owners. Across the country, according to a recent report from Senator Maria Cantwell (D-WA), chair of the Senate committee on small business and entrepreneurship, "Only 4% of the total dollar value of all small business loans goes to women entrepreneurs." As for loans from the Small Business Administration, which are specifically designed to support women and minorities, only 13 percent of SBA loans went to women in fiscal 2013. In Chair Cantwell's home state of Washington, women received only 11 percent.
Although overt bias does not go on, says Ladge, there are implicit biases as well as long-established stereotypes that do kick in. For women in particular, the public and lenders tend to think, "'Oh women go into starting their business as a lifestyle choice,'" says Ladge, meaning women don't really need capital. "I've heard this called 'the cupcake stigma.'"
Coping With the Cupcake Stigma
Lack of funding for women entrepreneurs, then, is directly owing to gender. Business models for women entrepreneurs have not gained sufficient traction or respect, especially among decision-making funders. But instead of acknowledging funder prejudice as the reason, pollsters and researchers usually cite the kinds of businesses women start and the different ways women grow them. Translation: Women often start companies that target women customers, and funders view women customers as a niche market with limited growth.
Oh sure. Tell that to Tory Burch or Sara Blakely at Spanx or Martha Stewart or pioneers like Estée Lauder and Debbie Fields.
Let's get real about respecting women's businesses and leadership.