According to Liz Hamburg in an article on USA Trends, one important reason women don’t receive venture capital (VC) or angel investment is…they don’t ask! “Women business owners with $1m plus businesses are still twice as likely to use debt instead of equity, according to Illuminate Ventures. Or they self-finance.”
As a business coach in Silicon Valley, I see this all the time. One of my clients finances her debt by moving credit card balances to one 0% interest credit card to another every year. Another dips into her home equity line every time there’s not enough cash flow to cover payroll. It’s not that these women aren’t smart—they’re very smart. Part of it is their vision of their business.
A larger part is avoidance of risk. Hamburg goes on to say, “Women are afraid of failure more than men.” Perhaps it’s because they are always aware of the need to maintain a certain level of security for their families. (A position Wall Street high rollers would do well to emulate.) Perhaps because regardless of source of the money they use in their business, they still feel as if they’re “playing” with their own money.
Hamburg also points out that there’s a dearth of risk-taking role models for women entrepreneurs. We may be out-numbering men in the workplace and the university, but we haven’t made it to the top of the food chain frequently. (About 3% of CEOs of major companies are women.)
Would it be better for women entrepreneurs to aspire to the winner-take-all mentality of previous generations of business owners? Probably not. But it would be good if we could get past the feeling of “less than” when we go to ask someone for money. Experience is proving that women make good managers. We handle our company’s money well, precisely because we regard it as “our money.”
How do you handle your debt? Every company has it, particularly companies with employees. If we’re going to expand our vision to community, to create jobs that heal our economy, environment and world, we’ll need to create bigger businesses.
What would it take for you to create a business big enough to go to a venture capitalist for money? Leave a comment below!
