Men vs. Women Entrepreneurs: Is There Really A Difference?

February 3, 2010

February 3, 2010

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There has been a lot of discussion in the entrepreneurial community about the seeming lack of women, especially in technology. Earlier this year, Vivek Wadhwa of TechCrunch posted a interesting article which discussed the notion that VCs are less likely to foster relationships and eventually invest in companies with women founders because of the hidden or systematic […]

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There has been a lot of discussion in the entrepreneurial community about the seeming lack of women, especially in technology. Earlier this year, Vivek Wadhwa of TechCrunch posted a interesting article which discussed the notion that VCs are less likely to foster relationships and eventually invest in companies with women founders because of the hidden or systematic biases.

 

This spring, the Kaufman foundation released a study entitled “Are Women Entrepreneurs Different Than Men?” in which the authors surveyed 549 founders of high tech companies to compare motivations and attitudes between men and women founders. Only 7% of companies randomly selected had women founders (actually up from 3% in 2004). Here are the findings:

1) Men and Women Are More Similar Than They Are Different-Consistent with most other gender studies research, differences between men and women are always blown out of proportion.

Our findings show that these successful women and men entrepreneurs are similar in almost every respect. They had equivalent levels of education (slightly less than half earned graduate degrees), early interest in starting their own business (about half had at least some interest), a strong desire to build wealth or capitalize on a business idea, access to funding, and they largely agreed on the top issues and challenges facing any entrepreneur.

2) Women Wanted More Mentorship and Get Capital From Partners-Women were more likely to start businesses because they were encouraged to do so and were likely to place higher importance on access to mentors. Women were also more likely than men to receive funding from business partners.

It has long been believed that women entrepreneurs have less access to capital than men (Aspray and Cohoon 2007, Robb and Coleman 2009). We found no differences in the types of funding sources tapped by male and female entrepreneurs, with one exception: Women were much more likely than men— almost twice as likely—to secure their main funding from business partners.

3) Explanations for Lack of Women Are Insufficient- According to the study, the reason that women favor a more traditional work-life balance and as a result don’t go into entrepreneurship is completely incorrect.

Life-balance issues have been noted as a reason for women’s low representation among entrepreneurs (DeMartino & Barbato 2003). Our data show no statistically significant gender differences in the life circumstances of these successful men and women. Their average ages when founding their first companies were early 40s. Likewise, successful men and women entrepreneurs founded their first companies when they had similar numbers of children living at home: one. Men were more likely than women to be married, as shown in Figure 2. These observations suggest that successful entrepreneurs of both sexes tend to have similar life conditions.

This is absolutely fascinating, especially since the study found that men were more likely to feel pressure to do a traditional job and be the breadwinner in a family.

One last quote which is by far the most important conclusion reached in the study:

We know very little about female entrepreneurs, and our ignorance of this important demographic is a serious blind spot in any effort to increase the total number of entrepreneurs participating in our economy.

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