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Women entrepreneurs are making progress in obtaining investment capital; minority entrepreneurs still have a ways to go; and the overall angel investment news is cautiously optimistic. So says Q1 Q2 2011 Angel Market Trends, the latest report on angel investing from the Center for Venture Research at the University of New Hampshire.
First, the positive news about women. In the first half of 2011, women angel investors represented 12 percent of the angel market, and women-owned businesses accounted for 12 percent of the entrepreneurs seeking angel capital. While these numbers aren’t outstanding, they do represent progress. More impressive is that 26 percent of the women entrepreneurs seeking angel investment in the first half of the year received it. In fact, the report notes, the percentage of women actually getting angel investments is above the overall average.
The news was not quite as good for minority entrepreneurs or angels. Minorities made up just 5 percent of the angel population, and 11 percent of the companies seeking angel financing were minority-owned. Like women, however, minorities received angel financing at a higher than the average: 17 percent of minorities seeking angel capital received it, compared to 15 percent of businesses overall. This is the positive news, but the report’s authors feel that the low percentages of minorities seeking angel capital is cause for concern.
If you’re not a minority or woman business owner, the news about angel capital is still pretty good (at least, relatively speaking). “The angel market appears to have reached its nadir in 2009 and has since demonstrated a slow recovery,” the report states. The market yield rate (the percentage of companies seeking financing that actually receive it) reached 15 percent in the first half of 2011, continuing a slow climb from 10 percent in 2008 and 12 percent in 2010.
Overall, total angel investments in the first half of 2011 were $8.9 billion—up 4.7 percent from the same period last year—and 26,300 companies got angel financing, up 4.4 percent from last year. The average investment was $338,400.
Some of the most popular areas for angel investing are not surprising, including healthcare services/medical devices and equipment (25 percent of total angel investments), industrial/energy (17 percent), biotech (14 percent) and software (11 percent). What is surprising is that media and retail sectors have become firmly entrenched in the top six most popular sectors for angel financing, with each getting 8 percent of total investments.
And for those of us looking to angels as a stimulator of job growth, there’s also good news. Angels have significantly increased seed and startup stage investing, which accounted for 39 percent of angel investments in the first half of this year—up from 26 percent during the same period last year. The report notes this is an “encouraging sign” for new business formation and job creation. And with an estimated 5 jobs created by each angel investment this year—or a total of 134,130 new jobs due to angel investment so far in 2011—it’s clear that angels can be a major engine of job growth if they feel confident enough to invest.
Finally, Some Good News for Women Entrepreneurs in Latest Angel Capital Study
View full post on Small Business News, Tips, Advice – Small Business Trends
Oct 12th
How do women-owned businesses differ from companies owned by men? Not as much as they used to, according to a recent study from the SBA’s Office of Advocacy. “Business ownership no longer can be analyzed simply on the basis of the owner’s gender; businesses owned by women and men more and more share the same general development patterns,” write the authors of “Developments in Women-owned Business, 1997-2007.”
Between 1997 and 2007, the report found, women’s share of total U.S. firms increased from 26 percent to almost 29 percent; during the same time frame, men’s share dropped from 55 percent to 51 percent. As of 2007, the top four revenue-generating industries were identical for businesses owned by women, men, and by women and men together; they were construction, manufacturing, wholesale trade, and retail trade.
But there is still one area in which women-owned businesses differ from those owned by men: Women-owned firms were less likely to have employees. In 2007, more than 88 percent were non-employer firms.
Employment is on everyone’s minds right now, and a separate report from the Ewing Marion Kauffman Foundation, “Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers,” suggests that with the right kind of help, women-owned businesses could become drivers of employment and stimulate the economy.
The Kauffman report found some similar gaps between men- and women-owed companies. For starters, while startup companies, especially high-growth startups, are the biggest source of new U.S. jobs, only about 35 percent of startup business owners are women. In addition, their startups are less likely to grow than those owned by men: Just 36 percent of women-owned startups in the report had employees, compared to 44 percent of those owned by men.
Lesa Mitchell, Kauffman Foundation vice president and author of the report, says that while women are breaking through the glass ceiling, they seem to be encountering “glass walls” that keep their businesses from expanding. As a result, three years after startup, just 19.8 percent of women-owned businesses in the Kauffman report make over $100K annually, while 32.8 percent of men-owned companies do.
Of course, some women (and men) may prefer to keep their companies small. But for those who want to grow, what steps would help them? Mitchell says:
1.) Establishing support networks early in the startup process is one way to position your business for growth. Joining the board of a company in your industry is one way to do this.
2.) She also urges successful women entrepreneurs to become role models and mentors for younger ones.
3.) And she urges more networking and collaboration between startups and bigger, more successful firms.
Networking seems to be a common thread when it comes to helping women-owned businesses thrive. In Forbes’ latest list of the best cities for women in business, the cities that topped the list had several things in common: a supportive legal environment, government procurement goals for women- or minority-owned firms, resources like the SBA’s Women’s Business Centers, and the presence of women’s business organizations to provide networking and support.
Women are often called “naturals” at networking, and most women business owners I know are pretty good at it. But to power your business to the next phase, you need to take networking to the next level. Don’t just network within your comfort zone: Get out of it.
Depending on your business’s needs, that might mean hobnobbing with angel investors or even venture capitalists. It might mean getting comfortable at male-dominated industry events or conferences, or meeting key people at companies that are much bigger than yours. Whatever you’re hoping to achieve with your business, there is someone out there who can help you do it—but not if you don’t get out there and meet them.
Image from Christian Kieffer/Shutterstock
Women Owned Businesses Have Come a Long Way But It’s Not Far Enough
View full post on Small Business News, Tips, Advice – Small Business Trends
Sep 29th
“Find a need and fill it” ~ Ruth Stafford Peale
That quote really sums up and represents the powerful emotional intelligence, intuition and instincts that women are demonstrating as leaders today in all their personal and business roles. Women are growing into their power demo status and using it to launch, transition and change, as well as to make a big difference.
In their bestselling book “Brain Sex: The Real Difference Between Men and Women,” Ann Moir- PHD and David Jessel write:
“The sexes are different because their brains are different. The brain is differently constructed in men and in women; it processes information in a different way, which results in different perceptions, priorities and behavior.”
It is this unique gender asset that women possess, this amazing EQ or emotional intelligence, that is producing some impressive data and statistics about women in business and in the workplace.
According to the Center for Women’s Business Research:
“If U.S.-based women-owned businesses were their own country, they would have the 5th largest GDP in the world, trailing closely behind Germany, and ahead of countries including France, the United Kingdom and Italy.”
Today’s professional women come from diverse generations and backgrounds.
They are doers, connectors, catalysts and agents of change. They are visionaries, making a huge difference, relentless in their passion for what they want to do and what they can do. They are mothers, daughters, sisters, wives, citizens, caretakers, aunts and mentors. They are triumphing over adversities, emerging stronger, learning to be more independent, resilient, persevering and unleashing their deep purpose.
Three distinct generations of women–Boomers, Gen X and Gen Y–are now in the workplace together, with so much to share, give and learn. Some of the language, style trends and history is different, but the commonality of wanting to be more autonomous, leave a legacy and support each other is what still binds the sisterhood.
There simply has never been a better time than now to be a professional woman. The opportunities for women in all fields have exploded thanks to the resolve of Susan B. Anthony, Rosa Parks, Gloria Steinem, Bella Abzug, Angelina Jolie, Oprah, Lady Gaga, Hillary Clinton and Angela Merkel, to name just a few. I thank them for paving a way and blazing a trail for me. They are strong examples with a fierce courage to step up and speak out with confidence, purpose and poise in demonstrating their leadership. Generation Y will be one the most entrepreneurial generations of our time!
Here is Forbes World’s 100 Most Powerful Women for 2011. This diverse and impressive group represents our present, but also our emerging potential.
Ladies, raise your glass and toast with me! “I will celebrate my feminine qualities and gifts, use them to heal and lead, claim my place and honor my role.”
View full post on Small Business News, Tips, Advice – Small Business Trends
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The U.S. debt ceiling has been making news for weeks (really months), but women business owners have debt ceilings of their own that could be holding their business growth back, the recently released PNC Women Business Owners Outlook survey reveals.
Overall, women business owners are optimistic. The survey found that almost half (48 percent) of U.S. women business owners believe their own companies’ sales will grow in the next six months, and 37 percent expect profits to rise. Six in 10 say their businesses are meeting or exceeding their sales expectations, and eight in 10 are optimistic about their businesses’ future prospects.
Women business owners have reason to feel good. According to the survey, in the most recent 10-year period, the number of women-owned businesses in the U.S. grew by 44 percent (twice as fast as men-owned firms) and, women-owned firms added 500,000 new jobs.
Despite these figures, just 41 percent of the women entrepreneurs surveyed plan to make capital investments in the next six months. Nor are they eager to take on new outside financing. Instead, PNC found, most women business owners are funding their businesses with credit cards and personal savings. Nearly 60 percent use a business credit card and 44 percent are using personal or family savings to finance business growth.
We all know it’s tough to get financing these days, but I think these statistics reflect ongoing issues among women business owners just as much as they reflect the state of small business lending. Many women entrepreneurs are reluctant to take on outside financing—whether because they want to keep their businesses manageable, don’t want to owe anyone anything, or don’t believe they could succeed at getting financing from banks, angels or venture capitalists.
And while bootstrapping your business is sometimes a smart idea (and sometimes it’s your only option), as your company matures failing to seek outside financing can hamstring your business and keep it from becoming a real player in your industry.
There’s also the irony that relying solely on your personal capital can put your personal finances at risk, explains Beth Marcello, director of Women’s Business Development at PNC, in announcing the survey results.:
“While women business owners often describe themselves as being debt-averse, those who rely strictly on savings and credit cards leave few options to weather downturns without cashing in personal assets or taking a hit to their personal credit history.”
PNC found that women business owners rely on an average of 2.7 sources of money to fund their businesses. Additional sources of capital include a line of credit from a financial institution (38 percent), personal credit card (34 percent) and a business loan from a financial institution (26 percent). If you’re not already doing so, Marcello says it’s crucial for women business owners to establish separate business credit and use it wisely. As you do so, keep in mind the four C’s of credit:
1. Capacity: What is your company’s borrowing history and track record of repayment? How much debt can your company handle?
2. Personal Capital: Good news for women who have bootstrapped their success: While banks don’t want you to put all of your personal assets on the line, having some level of personal capital invested in the business makes bankers more inclined to lend to you.
3. Collateral: Banks will want you to pledge business collateral, which can include real estate, inventory or accounts receivable.
4. Character: Banks are more likely to lend to business owners who have good credentials and references. Make sure your business credit report is clean and make all your payments on time to keep your reputation spotless.
If you have plans for expansion—as many women business owners in the PNC survey do—now is the time to start expanding your scope beyond personal sources of capital and laying the groundwork for outside financing.
Why Are Women Business Owners So Reluctant to Raise Their Debt Ceilings?
View full post on Small Business News, Tips, Advice – Small Business Trends