Set-Backs and Solutions for the Woman Entrepreneur

Tory Burch, the Chairman, CEO, and Designer of Tory Burch LLC.

In 2010, the Kauffman Foundation declared we had entered “Decade of the Women Entrepreneur”. Following hundreds of years of significant suppression for female professionals, it is definitely an exciting time to see women represent the largest percentage of undergraduates at all major American universities, own businesses generating over $1.4 trillion in sales, and increasingly head major corporations. However, that’s not to say there’s not much work still to be done. Even with these improvements, women still only make up 27% of business owners in America and generate 20% in sales comparatively to men. There are systematic issues that must be understood, discussed, and solved before women can be expected to innovate and grow professionally at the same rate as their male counterparts.

Looking Back

The first set-back that must be taken into account when considering women entrepreneurs is gender role history. Until the 19th century, married women were legally and economically subordinate to their husbands and could not buy or sell property. Entering the 20th century, it was almost universally accepted that a man should be in the public sphere, and a woman at home as a wife and mother. Entrepreneurship was exclusively a man’s game This gender history has created social constructs, that in turn heavily influence female aspirations. To fight these social stereotypes, women should support each other when entering these new domains. An effective solution is through “lean-in circles”, sororities of sorts where female executive and entrepreneurs can relay experiences, difficulties, and strategies for the workplace. These groups develop more ambitious, confident, and prepared leaders who create tremendous advances towards breaking the glass ceiling.

Old Boy's Club

The difficulty for women to enter previously established networks should also be considered. A network ultimately can heavily influence the net worth of a person, by exposing them to diverse business opportunities. An early entry to a network could be achieved through a graduate program, for example, but even still women are predominantly in hospitality and direct service studies, with currently 80% of Education degrees being conferred to women, as opposed to 80% of Engineering degrees, a faster growing sector, to men. Women must confidently enter groups historically dominated by men and be more present in these spaces. A simple solution is a shift away from telecommunication and become physically visible at the office. This gives way to the propinquity effect, which dictates that the more present the woman is in the workplace, the deeper the connections she’ll make and the greater influence she’ll yield.

Financial Backing

An entrepreneur could be fantastically talented, creative, and well-connected, but her efforts are likely to be futile without proper financing. Historically, women are discriminated for their gender by venture capitalists, angels, and banks, which distribute smaller loans to them with much higher rates, comparative to those offered to men. Even taking into account that most entrepreneurs self-finance, there’s an economic gender disparity because women generally have less personal wealth than men. Currently, women are being paid 79 cents to a man’s dollar and face negative effects from the wealth escalator and debt anchor. More fair capital attainment opportunities become available to women through legislation. The 1975 Equal Credit Opportunity Act prohibits entities from discriminating against women when giving loans and the 1988 Women’s Business Ownership Act formed a commission to support economic development for women. Additional exposure and political activism must target gender pay inequality.

Acknowledging the Problem

Women might also be held back by through the refusal to acknowledge that there is a problem of gender disadvantages. Claiming to be more progressive, people assume a gender-blind perspective, invalidating the female struggle for professional equality. Furthermore, John Whitehead researched the lack of awareness of privilege in men and the active identity that women had to protect in gender, and reached the conclusion that some women might, out of distaste in taking on a political role, choose to ignore their systematic professional inferiority. The problem with not accepting that is, of course, not being able to reach a solution. It is important, therefore, to bring gender bias to public light. Arjuna, an activist investment advisory group, is working to push for gender pay and preferential treatment transparency within large companies, following Katie Moussouri’s allegations against Microsoft . Understanding discriminations will encourage studies and advocacy for developing equality.