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The Economic Impact of Female Entrepreneurs


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In 1999, Babson College’s Diana Project published its seminal report on the state of venture capital investments in female entrepreneurs. This report set out to examine why fewer than 5% of all ventures receiving equity financing had women on their executive teams. While antiquated logic might have left you to quickly surmise that female entrepreneurs were neither prepared nor motivated to found high-potential businesses and as a result, were not good candidates for venture capital investors, the Diana Project report actually found stark evidence to the contrary.

Women indeed had the skills, expertise and experience required to lead high-growth ventures, yet, despite their preparedness and qualifications, were consistently left behind.

Fast forward to the second iteration of the report published last year. Unlike the bleak picture the original report drew, time shifted the landscape in the favor of female leaders. While there is still much progress to be made, the 2014 report uncovered immense growth. In fact, data from the report showed that between 2011 and 2013 more than 15% of the companies receiving venture capital investment had a woman on the executive team, compared with just 5% in 1999, proving that given the chance and access to the right networks, women can command equity financing to grow their businesses. And, to further show that women can and will succeed when given the opportunity, First Round Capital discovered just this week that their investments with a female founder performed 63% better than those with all-male founding teams.

The Economic Impact of Female Entrepreneurs

  1. The Economic Impact of Female Entrepreneurs
  2. PRESENCE + IMPACT 36% of U.S. Businesses Women are majority owners of 16% of Total U.S. Employment $3 trillion. Companies with women on the executive team have an economic impact of 23 million jobs. Translates into the creation and maintenance of
  3. PRESENCE + IMPACT The average dollar investment in businesses with a woman on the management team was slightly higher for all three years during 2011-2013. (Businesses with women) $12 Million (Businesses without women) $8 Million
  4. PRESENCE + IMPACT California, New York & Massachusetts have the highest number of investments in firms with women on the executive team.
  5. BREAKDOWN 18%in 2013 9% in 2011 Percent of VC-funded companies with a woman on the executive team.
  6. BREAKDOWN Percentage of total invested capital received by companies with women on the executive team. 27% in 2013 9% in 2011 * $7.1 billion of $26.4 billion * $816 million of $8.9 billion
  7. BREAKDOWN Venture capital firms with women partners are twice as likely to invest in companies with a woman on the management team.
  8. BREAKDOWN Venture capital firms investing in companies with women CEOs have nearly 4 times more active investments than those firms not investing in women.
  9. @OpenViewVenture Data in this infographic first appeared in Babson College’s Diana Project’s Diana Report Women Entrepreneurship 2014: Bridging the Gender Gap in Venture Capital. View the full report here: Illustrations by @RachelWorthman