The Diana Project: Women Business Owners and Equity Capital: The Myths Dispelled

Abstract

This report from the Diana Project explores the extent of equity investments in women-owned businesses. Surveyed were 1,700 applicants to the 2000 Springboard forums to examine the current state of venture capital for women entrepreneurs interested in, and capable of, high growth venturing, in hopes of debunking myths about women and venture capital.

Eight myths about women and equity capital are identified: (1) women don't want to own high growth businesses; (2) women don't have the right educational backgrounds to build large ventures; (3) women don't have the right types of experience to build large ventures; (4) women aren't in the network and lack the social contacts to build a credible venture; (5) women don't have the financial savvy or resources to start high growth businesses; (6) women don't submit business plans to equity providers; (7) women-owned ventures are in industries unattractive to venture capitalists; and (8) women are not a force in the venture capital industry.

Each of these myths is examined, and many are shown to be false or undergoing change. Nonetheless, a disparity exists between men- and women-owned ventures and their access to funding. Six recommendations to ensure equity investment in all entrepreneurial ventures are offered.

Keywords: Firm growth, Equity capital, Venture capital, Gender, Female owned businesses, Female entrepreneurs