Published 08 January 2018 Category: ENTREPRENEUR, STARTUPS, BUSINESS, INSIGHTS

Investing in Female Entrepreneurs

There has been great debate over the years about which gender is better at entrepreneurship. An array of research was conducted to understand the innate differences between male and female entrepreneurs, showing that women are just as adept at running a business and even have several advantages over men. However, females are often faced with greater barriers to becoming an entrepreneur compared to men, especially when it comes to acquiring start-up funding. In the United States, women only receive about 2% of all venture funding even though they own 38% of all the businesses, despite the fact that companies run by women earn 13% more in revenue than those run by men.

Finding funding for a startup is crucial, yet women are at a disadvantage in this area. Through an examination of interviews between venture capitalists and entrepreneurs at a startup funding competition, researchers found that the venture capitalists asked different types of questions between male and female entrepreneurs. 67% of the questions asked to males were promotion-oriented, focused on hope, achievements, advancement and ideas, while 66% of questions for female entrepreneurs were prevention-oriented which focuses on safety and stability. The answers typically matched the orientation of the question, which meant that the men were portrayed in a more favourable light.

From the study published in the Journal of Entrepreneurship & Organization Management, we have highlighted the key differences between male and female entrepreneurs, and recognized the benefits that women can bring to a business.

1. Age Difference

Men typically start their entrepreneurial journey earlier than their female counterparts. 40% of men started their first entrepreneurial venture before 35, whereas only 33% of women did this. Women entrepreneurs are typically older as their entrepreneurial journey started from a side hustle, or as a means to achieve work-life balance once they became mothers.

By starting their business later, female entrepreneurs are more mature and generally have more experience in dealing with challenges. This gives them an advantage over male entrepreneurs as they are less likely to be set back by obstacles and have more resilience to overcome them.

2. Motivation

The main reason for starting a business from both genders is for more autonomy. However, men are more likely to start a business for financial gain whereas women are more focused on impacting the community and making a difference. Because of these differences, women are more invested in building long term relationships instead of short term gains. Female entrepreneurs are more emotionally invested in the business and they have a higher sense of purpose, beyond monetary ambitions.

3. Emotional Intelligence

In today’s current state, it’s never been easier to start a business. With lower barriers to entry and high competition, every business will struggle to be the best in their industry. Only companies that can truly understand the needs of their customers will have an advantage. Customers will continue to have higher expectations and will expect more connection and engagement with the companies that they interact with.

Inherently, women entrepreneurs are much more in tune with their emotions and this spills over to their businesses as well. This means they have greater empathy for the company’s stakeholders, including their employees, clients, vendors, and the community. They can understand their customers’ needs and generate greater value for their audience.  

4. Work Life Balance

Burnout can have a significant impact on a company and having a healthy lifestyle outside of work can greatly enhance an individual’s performance at work. As an entrepreneur, the line between work and personal life is often blurred. However, female entrepreneurs are more likely to have greater work life balance as they place greater value on personal relationships compared to men.

Women Entrepreneurs Gaining Traction


In the recent past, many investors have recognized the benefits of investing in female-run businesses. In fact, there is a rare breed of male investors who are currently investing heavily in female entrepreneurs.

Angel investor, Adam Quinton, says he invests mostly in companies that have women leaders or founders not out of kindness, but rather, based on what will make him money.  It so happens that of the 15 companies he invested in over the last five years, all except two have at least one female founder. Based on research, Quinton may be onto something as research shows that venture capital firms investing in companies run by women do perform better.

Another male investor investing heavily in women entrepreneurs is Jeremy Liew. He’s a partner at a well-known Silicon Valley venture capital firm specializing in early stage investments. Among the many female-led companies he’s invested in, Liew was a first-round investor for two strong female founded companies, Jessica Alba’s The Honest Company and Katrina Lake’s Stich Fix.

His reasoning for putting his bets on women-led businesses is because he believes that young women are good predictors of what will be popular as they are typically early adopters of new products and services. Naturally, it’s easier for female entrepreneurs to understand what business idea would be of interest to other women and girls.

Even Shark Tank’s investor, Kevin O’Leary leans towards investing in women entrepreneurs. He said that over his 9 years of investing in small companies, all his returns came from ones that were led or owned by women. As of December 2015, the ROI from businesses owned or run by women were, on average, 75% higher than from those led by men.

With the unique qualities that women can bring to a business, we are optimistic about the future and look forward to seeing more female entrepreneurs getting the financial support they seek.