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Females Building Their Entrepreneurship Legacy Is Growing But Still Facing Barriers

Joelle Foster CEO of North Forge Technology Exchange

Women in entrepreneurship is growing and the gender gap is narrowing:

  • female-owned enterprises grew 75% from 2005 to 2013,
  • 15.6% of SMEs (small and medium businesses) are majority-owned by women,
  • In 2019, 37.4% of the self-employed were women,
  • Women entering entrepreneurship has increased to 28% compared to 11% in 1976,
  • A 10% increase in female-owned SMEs could add $198 billion to Canada’s GDP! 

Startup mom and spirited activist for Canadian entrepreneurship Joelle Foster, CEO of North Forge, is actively working on bringing more female founders into the Founders Program as women account for only 25% of the current founders. “People who know me know I am passionate about entrepreneurship. Part of my focus is to bring more women into the innovation ecosystem to help them build their legacies and succeed in business.” 

Choosing entrepreneurship:
Women choose entrepreneurship for different reasons than men:

  • Women are less motivated by money:
    • 64% want to be their own boss,
    • 59% are pursuing their passion,
    • 30% want to make a positive contribution to society.
  • 70% found an unexpected opportunity,
  • 57% found it difficult to find employment,
  • 56% were dissatisfied with their preview job,
  • 44% need to work from home due to family responsibilities.

Female and male entrepreneurs also have different characteristics. Women are:

  • as educated as men and more likely to have a graduate degree,
  • more likely to focus on retail, personal services, and accommodation,
  • a more significant percentage of new business but own small businesses,
  • more likely to be home-based,
  • and are more likely to outperform men in ROI.
Kelly Fournel and Joelle Foster at the FabLab's 10th Anniversary Event
Kelly Fournel, CEO of Tech Manitoba, and Joelle at the FabLab’s 10th Anniversary Event

Return on Investment (ROI):

When it comes to ROI, women outperform men by 35%. “This is great to hear,” shares Joelle, “so then why are fewer women still starting or leading businesses when we’re supposed to be good at it?” In Manitoba, the rates of women with entrepreneurial intentions are higher than in other provinces, however, Manitoba has historically underperformed in female-led company creation compared to its Prairie counterparts.

Roadblocks:
Roadblocks are abundant for female entrepreneurs. “Women who are building successful technology companies and women who work in them often have to navigate significant gender-based obstacles. These psychological barriers live in our subconscious and can affect our confidence and mindset” noted Joelle.  

Barriers to entrepreneurial success women face are:

  • cultural stereotypes,
  • implicit bias,
  • attitudes or stereotypes that affect our understanding
  • microaggressions,
  • unconscious bias,
  • lack of encouragement,
  • absence of role models,
  • and culture of incubators and accelerators – “bro culture” especially in tech,
Joelle with her daughter Jocelyn battling robots at the Innovation Hub
Joelle with her daughter Jocelyn learning to battle robots at the Innovation Hub

There is a perception that having children impacts a woman’s ability to lead. For example, when a woman is pregnant or has a child at home, there is often an unconscious bias that “she might not be the best leader. She won’t have a ton of time for this,” said Amanda Elam, research director for Babson College’s Center for Women’s Entrepreneurial Leadership

With all these barriers still in place, some might ask why women are still pursuing entrepreneurship in technology. It’s because there is abundant opportunity and growth potential:

  • Female-founded companies performed 63% better than the all-male founding companies. The Kauffman Fellows Report found that women-led teams generate a 35% higher return on investment than all-male companies.
  • Women entrepreneurs account for improved economic growth and stability within a country. They inspire other women to start businesses. This leads to more job creation for women which ultimately helps in reducing the gender gap in the workforce.
  • Women-led companies have historically performed 3x better than those with male CEOs. This trend is true with startups, too. 
  • Women represent the most significant market opportunity and control $20 trillion in annual spending.

When women earn an income, they invest 90% back into their communities. “Investing in women translates into communities that prosper and generate a multiplier effect. It’s an empowering example for the next generation of women,” Joelle advises. 

Investment and venture capital:
When it comes to venture capital, less than 3% of equity investment goes to women-led businesses, although women represent 40% of business owners!

So why do VC’s invest in more male startups? “From my experience, women are not comfortable asking for investment. They also second guess themselves and wonder if what they are putting out there is worth it – it’s a crazy internal dialogue.” shares Joelle. “Also, women tend to solve problems important to women. But men, who tend to be the funders, don’t understand these problems or why they are important.”

When pitching to investors, “using an expressive tone and or having a high pitch in your voice can sometimes work against women” said Michelle Abbs, director of the Miami Women Innovating Now (WIN) Lab®. “It doesn’t always instill confidence in investors, and that’s implicit bias.”

“Do we need to change our thought processes around gender? Behind the intended support, fundamental metrics relate to the lifestyle businesses which are typically slower-growth. The vast majority of bigger funding sources are looking for a big return on their investment. It’s possible that it may not be fully gender-based as there is a set of expectations. Not every woman wants to build a huge company,” explained Joelle.

“We, therefore, need more female investors actively investing in female-led businesses. There are less unconscious biases,” explains Joelle. “If you have kids, some investors consider it a liability because they perceive that they are not 100% devoted to the business. Investors need to look at and understand the strengths that women have.” 

To make change, Joelle, along with Sandra Foster are two of the four Managing Partners of Women’s Equity Lab (WEL) Manitoba, a first in the Province. WEL was created because most women investors are missing out on the rewards of early-stage investing, including the opportunity:

  • to make positive impacts on community and society,
  • to support companies that resonate with them and help them grow,
  • to engage with incredible entrepreneurs and investors,
  • to participate in new fields, transforming industries and the latest innovations,
  • for potential significant financial gains.

Through early-stage investing, women can gain the inside track and play a leading role in building innovative companies transforming innovation in healthcare, education, agTech, information technology, and the environment while potentially impacting their portfolio returns.

Secondly, more women-directed capital will fund and provide expertise to more women-led and women-focused businesses and increase the amount of capital available to early-stage startups.

Finally, equal shareholder representation and active participation by women in venture investing should lead to more women board directors, advisors and women in leadership.

Sandra was interested in being involved with WEL Manitoba because “as an experienced angel investor I understand the importance of Angel investing to startups,” explains Sandra. “I am very keen to see more women involved investing in our economic future. I believe that WEL MB will open up opportunities for investing in Manitoba that has previously not been available”. 

 “It’s the perfect fund for a female investor who might be hesitant about not wanting to take too much risk with their money. It’s a safe place for your first dive into the world of private equity,” reassured Joelle.  “The cap is $5,500 per limited partner.” 

“One of my favourite quotes”, shares Joelle, “is from Sara Blakely, founder and CEO of Spanx. “Don’t be intimidated by what you don’t know. That can be your greatest strength and ensure that you do things differently from everyone else.”

_____

Next Steps:

Do you have an idea that would solve a problem but need help with the business side of things? 

We would love to hear from you! Tell us about your idea (don’t worry if you don’t have the answers to all the questions yet), and our Programming Team will contact you to set up a meeting to chat about it.

Does helping design Manitoba’s economic future with your legacy pique your interest? Are you interested in investing in local science-based, tech-enabled, or advanced manufacturing businesses? If so, the North Forge Angel Network Team, would love to hear from you! Contact them today to set up a meeting.

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