Why is it different for women?
All over the world, women who start businesses have been identified as courageous, forward looking and engaging with the world of business. They are able to offer employment, keep businesses afloat and generate an income that can keep households fed and children in school.
Often, according to the experts, women owned businesses exceed expectations when it comes to growth. Generally speaking, women, it seems, are less likely to look forward to fast growth when it comes to a start up. But when growth does come, most women are not likely to know the exact direction to take – especially when growth means more investment, more capital.
When it comes to specialized areas such as high tech, women are less likely to source funding for expansion – although the potential is out there. Unlike their male counterparts, women who start their own businesses are less likely to engage aggressively in sourcing funding for expansion. They are less likely to invest in high profile employees and are more likely to continue at the same level of growth and function.
Research also shows that men are more likely to start a business with access to considerable capital than women. Women are naturally cautious but it seems that not having access to capital is a universal thing when it comes to women owned businesses. It may also be that carrying debt and other factors that come with expansion and seeking capital, may also be worrisome for many women.
Some of the world’s best ranked companies owned by men are more likely to have team ownership than women – which showcases a wider access to capital and a greater need for growth and expansion. Men also tend to employee more people and go for expansion at an earlier time than women owned businesses within the same time line of growth.
Experts believe that access to equity is a major factor in capital requirements. Raising equity among businesses founded and owned by men was a relatively easier, much earlier process than women who tend to be more realistic and cautious when it comes to raising capital via equity. In the case of women who ran their businesses from home, growth into the next stage and access to capital that comes with expansion, were not readily available options.
For most women, lack of access to collateral is also an issue. A man might not hesitate to use his home as collateral for a business loan but woman may think twice about it. It also has a lot to do with a woman’s perceived level of access to capital ; for some women, growth and expansion is not always the road forward. They maybe happy with their success so far and happy to level off at that point.
Although questions do remain about women having access to capital, there are more questions than answers when it comes to the subject. Is it really so – is there a gender dimension in it or is it a mere case of sensible women entrepreneurs not wanting to bite more than they can chew?
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