And what about women, in particular? Faley says there are a lot of women who show an interest in entrepreneurship at the Ross School. “From the men in the program we tend to see a lot of ‘going for the fences,’ they tend to think big, while the women entrepreneurs tend to lean toward businesses of smaller scope that are of lower risk—it’s a paradigm shift versus filling a niche,” he says. But does that mean that, in general, women aren’t risk-takers or don’t have what it takes to start high-growth businesses?
A book written last year by Elizabeth Gatewood and four other academics, titled Clearing the Hurdles: Women Building High-Growth Businesses takes a hard look at many assumptions people have about women entrepreneurs, finds the underlying truths, and offers women strategies for overcoming obstacles. The book combines research on women entrepreneurs conducted by all five professors and shows that by the 1990s, women entrepreneurs were on par with men in terms of business education, corporate experience, and technical expertise. Rather than a lack of hard skills or innate tendencies, it was persistent stereotypes about women’s financial skills and management savvy that led to roadblocks; for instance, their inability to secure funding to grow their businesses at a fast pace.
“Our research indicates that women invest in their enterprises at a lower rate than men do, not because they do not believe in their ventures but because they simply do not have the same level of financial resources available,” says Gatewood. One explanation is that while women have made incredible progress in the world of business, they still lag in wages, earning about 73% of what their male counterparts earn for comparable responsibility. This is just one reason why they may be behind when it comes to building the cash reserves necessary to start a company and to show potential investors that they are serious about their commitment to the concept.
Clearing the Hurdles confirms the findings of The Diana Project, a study sponsored by the Kauffman Center for Entrepreneurial Leadership, the U.S. Small Business Administration, and the National Women’s Business Council in 2001. Looking at a group of women entrepreneurs who participated in a series of Springboard forums held in 2000 (the Springboard forums were launched by a consortium of women’s organizations intent on accelerating investment in women-led businesses), the Diana Project found that, “The growth aspirations, human and social capital, industry choice, and financing strategies of many women are consistent with general practices of entrepreneurs seeking equity to grow their ventures…Yet the disparity between men and women entrepreneurs and their proportional access to and receipt of equity funding continues to exist.”
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