Photo of feet at the starting line.

Women, Money, Bias and You – An Invitation to Change it Up

By Laura Gallagher
President of The Creative Company
Women’s Entrepreneurship Day Wisconsin Chairwoman

There are several ways to make over $100K a year and one of them is to start and run a successful business. Some 9.5% of men in the U.S. make over $100K a year, but just 2.4% of women will make over $100K.

Why is this? If women are starting businesses at fives time the rate of men, why are men much more likely to make over $100K? 

Consider that:

  1. While the share of women-owned firms keeps climbing – from 28% in 2002 to 38% today – their share of employment (8%) and revenues (4%) remains essentially unchanged.
  2. Although the number of minority women-owned businesses has increased at a rate nearly three times that of all women-owned firms since 2006 (127% versus 45%), their average annual revenues are less than half that of the average women-owned firm (just under $69,000 compared to $143,000.)
  3. Since the recession the industries with the greatest share of new women-owned firms are found in historically traditional sectors for women: Services (which includes hair and nail salons, up 98% compared to 45% overall); administrative, support and waste management services (home to janitorial and landscaping businesses, +64%); and accommodation and food services (+62%).
  4. Only 2% of women-owned enterprises break $1 million in revenue. Those owned by men are 3.5 times as likely to reach that million-dollar threshold.
  5. Female entrepreneurs receive only about 2% of all venture funding, despite owning 38% of the businesses in the country.
  6. Even among SBA loans, women receive 2.5 times less money than men: on average, women get $59,857 while men receive $156,279.
  7. For small business loans, women receive just 16% of all loans even though 1 in 3 small businesses in the U.S. are owned by women.

What gives?

We’re going to explore some of reasons for these disparities and discuss ways to solve them at Women’s Entrepreneurship Day Conference in Wisconsin on November 14, 2017 at Monona Terrace in Madison.

Some examples of the heavy
– yet practical –
topics we will cover

Promotion vs. Prevention – a mindset that is costing us millions.

Harvard Business Review recently did a study on funding for women-owned businesses which exposed how some discrimination is hardwired in the current system. “According to the psychological theory of regulatory focus, investors adopted what’s called a promotion orientation when quizzing male entrepreneurs, which means they focused on hopes, achievements, advancement, and ideals. Conversely, when questioning female entrepreneurs they embraced a prevention orientation, which is concerned with safety, responsibility, security, and vigilance.”

HBR found that 67% of the questions posed to male entrepreneurs were promotion-oriented, while 66% of those posed to female entrepreneurs were prevention-oriented.

A promotion question begets a promotion answer, and a prevention question begets a prevention answer. This pattern of behavior perpetuates a cycle of bias that can aggravate the funding disparity. By responding in kind to promotion questions, male entrepreneurs reinforce their association with the favorable domain of gains; female entrepreneurs who respond in kind to prevention questions unwittingly penalize their startups by remaining in the realm of losses. In this scenario, entrepreneurs who fielded mostly prevention questions raised an average of $2.3 million in aggregate funds for their startups through 2017 — about seven times less than the $16.8 million raised on average by entrepreneurs who were asked mostly promotion questions, HBR reported.

Think this doesn’t apply to you as a small-to-medium sized company with no angel investor? If you’re a woman, it does. Bias greets you every day anyway. Bias doubts you before you even walk through the door. Bias puts limits on you before you even get started for the day. And bias can stop you from moving forward with confidence. Bias is at the door every day for every woman in business.

Regardless of the HBR study, between 2007 and 2016 the number of women-owned firms increased by 45%, compared to just a 9% increase among all businesses. Therefore, over the past nine years, the number of women-owned firms has grown at a rate fully five times faster than the national average. Comparative employment growth is even stronger. Employment in women-owned businesses has increased by 18% since the recession, while among all businesses employment has declined 1% since 2007. We are on our way. We can move even faster by examining and facing these issues at our Women’s Entrepreneurship Day in Wisconsin.

To Celebrate, Empower, and Support – the Power of Women’s Entrepreneur Day

Over the last year, I graduated from two national programs: Harvard Professor Michael Porter’s Initiative for a Competitive Inner City (ICIC) and Goldman Sachs’ Goldman Sachs’ 10,000 Small Businesses at Babson College. These programs are designed to help entrepreneurs create jobs and economic opportunity by providing access to education, capital and business support services. Alumni at both of these programs far outpace other businesses.

When I saw what could happen when we people were properly resourced from the beginning, I started to think about how I could bring the best of the best to Wisconsin.

When I graduated from ICIC in New York City, I also bought a ticket to Women’s Entrepreneurship Day at the United Nations. It was a fantastic day with a great program filled with stories from female founders and CEOs. I applied to be an Ambassador and Spokesperson for WED and then in June, I made the decision to put together an Advisory Board and create a conference for female entrepreneurs and leaders here in Wisconsin in conjunction with a global community of women who are doing their own events for WED.

Which brings us to now. On November 14, 2017, it’s happening here and you’re invited. We are going to celebrate, empower and support women entrepreneurs and leaders at the inaugural event for Women’s Entrepreneurship Day Wisconsin.

Is This for Me? – Why You Should go to WEDWisconsin

You’re probably wondering whether you can afford to set aside a whole day for this. That’s a good question to ask because you already know your time is the most valuable resource you have.

Here are some reasons you might want to consider:

  1. We’re not going to play it safe. This is a conference with real answers from real women who are at every stage in business – from start-up to thriving. They will tell you their make or break moments, their funding successes and failures, and their sources of strength against adversity.
  2. You will be challenged in more ways than one. You will be in the game from the moment you walk in the room. You’ll feel the energy in the room of women entrepreneurs and leaders who will help you move your plan forward.
  3. You’ll meet leaders from small companies and big companies, policy makers, educators, women in tech and women in the sciences. You will meet women who believe we are worth more and are doing something about it.
  4. Lastly, Women’s Entrepreneurship Day is a global event happening in 144 countries in November. You will be joining a global network of women in a movement for a better world. Launched in 2014, WEDO works globally to empower women and girls to become active participants in the economy by igniting a network of women leaders, innovators, and entrepreneurs to initiate startups, drive economic expansion, and advance communities around the world.

My Story – Why I Decided to Bring WED to Wisconsin

I’m always doing things that make me uncomfortable, that are super hard and that often make people around me wonder why I do it. I do it in part because if I waited around for everything to line up perfectly, I’d never get it done. I take a leap of faith despite the fear and pursue challenging projects: I published a book, landed on a national board, was recognized as a trailblazer in Wisconsin, provided for two children, studied at the top entrepreneurial college in the country (a pipe dream 30 years ago), and employed staff. In short, I have made a difference in this world in my own way with the one and only life I’ve been given.

So often, we listen to the whispers from other parts of our lives where we were told we were not good enough. Those voices echo through our minds when things get tough.

“What if it doesn’t work?”

“What if you fail?”

I say instead, “What if you do fail?” That’s okay. That’s the point of living, isn’t it? To learn. Make the mistakes as fast as you can and learn from them. Action, experimentation and creativity lead you to success. Too many people stand on the wayside wondering “what if.” But I ask: What if you’re going to be awesome at this? What if what the world needs is exactly what you can bring to market? What if you were wildly successful? What if it’s your turn and your time?

I’ve found that the answers appear when I open doors and peek inside. If I just take the first step, the next one comes easier. So join us at WEDWisconsin where you will be immersed in ideas and stories. Then see what happens next.

This is an invitation to possibility, to the future, to see what can happen when you decide you’re worth it.

Your seat is waiting for you at www.wedwisconsin.wpengine.com. Be a part from the start. (And men, you’re welcome to attend, too. You can learn from us and with us!)

Sources:

#180in120 #ChooseWomen #WomenWOW #WEDWisconsin #LeanIn

Laura Gallagher, Regional Ambassador of Women’s Entrepreneurship Day, WEDWisconsin Chairwoman of the Board, President/ Founder of The Creative Company and Author

Laura Gallagher is a community, local and national business leader serving successful entrepreneurial companies and nonprofit organizations primarily in Wisconsin. In 2016, she was recognized by the Governor as a Trailblazer in Wisconsin. She is the founder and CEO of The Creative Company and is a 2017 alumnus of Babson College’s 10,000 Businesses Program with a Certificate of Entrepreneurship and a 2016 graduate of Harvard Professor Michael Porter’s Initiative for a Competitive Inner City. The Creative Company is certified by the State of Wisconsin as a Woman-Owned Business Enterprise.

Phone: (608) 442-6336
Email: laura@thecreativecompany.com

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