Women vs Men: Angels and Venture Capitalists
Recent studies indicate that women-owned entrepreneurs raise small amounts of capital to finance their firms and are more reliant to personal rather than external sources of financing in comparison to men. Male founders were more than three time as likely as female founder to access equity financing through angels or VCs (14.4% vs 3.6%).
Women vs Men: Friends and Family
If women entrepreneurs do not seek, or if they are not able to obtain, external capital, their prospects for growing their firms are diminished considerably. Men were also more likely than women to tap networks of close friends for financing (9.2% vs 1.8%).
Women vs Men: Peer to Peer Networks
In terms of financing firms regardless of whether they are high growth or lifestyle firms, previous studies reveal that women start their businesses with small amounts of capital and are less likely to raise capital and are less likely to raise capital from external sources. Men were also more likely than women to tap networks of business acquaintances for financing (13.5% vs 5.4%).
Women vs Men: Banks
In particular, women employ a much lower percentage of external equity capital to finance their firms. More than half of each (51.3% of men and 55.4% of women) used bank financing as a source of capital for their Inc. 5000 firm.
Source: National Women’s Business Council, Access to Capital by High- Growth Women- Owned Businesses, Prepared by Susan Coleman, D.P.S. and Alicia Robb, PH.D..