A love-hate relationship
Women have traditionally had a love-hate relationship with money. On the one hand, we love to spend it (can you say Gucci or Jimmy Choo), but we hate to talk about it. Many women were brought up that it’s impolite or embarrassing to talk about money. In one study conducted by Merrill Lynch, 61% of women said they would rather discuss the details of their own death than money! Women also tend to have a more complicated relationship with money than men. For women, money represents not only purchasing power but also security and the ability to care for their families. This creates an emotional connection which can make money more frightening to deal with. Unfortunately, these attitudes around money are impacting the ability of female entrepreneurs to secure the funding they need to grow their businesses. According to the 2018 State of Women-Owned Businesses report by American Express, “there is a significant gap between the number of women who start businesses and those who commit to growing them. Unlocking the potential of women-owned businesses represents a powerful opportunity for economic growth.” It’s time for female entrepreneurs to overcome the money taboo, ask for what they need and embrace what money can do.
Women don’t ask
We’ve seen the statistics many times; women don't ask for raises as often as men. Linda Babcock, Carnegie Mellon University economics professor and co-author of Women Don’t Ask, says men are four times more likely than women to ask for a raise—and when women do ask, they typically request 30% less than men do. This trend applies to female entrepreneurs as well. According to data from the Kauffman Foundation, 40% of new entrepreneurs in the U.S. are now women, and the number of new women-owned businesses is growing at double the rate of male-owned businesses. In spite of this incredible growth, women are not asking for the funding they need to grow their new ventures. A recent study published in Venture Capital showed that females are less likely to ask for outside funding than their male counterparts. This phenomenon is supported by a survey from SCORE with data collected from more than 20,000 U.S. small business showing that only 25% of women entrepreneurs seek financing over the lifespan of their business. Another study by Fundera revealed that female entrepreneurs who do seek funding ask for roughly $35,000 less than men do. As Susan Sarandon’s character Louise Sawyer famously declared in the movie Thelma and Louise, “you get what you settle for.” So, how can we get women to ask for the funds they need to grow their businesses? It all starts with the right mindset.
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