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Venus vs. Mars
High-flying female entrepreneurs differ from their male counterparts
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Business New Haven
3/5/2001
By: Susan Cornell
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Women who own fast-growing businesses are more likely than women who own slower-growing firms to access a wide range of credit sources and to borrow to finance their businesses.
Moreover, such fast-growth female entrepreneurs access capital much differently than their male counterparts, as well: They are more likely than their male counterparts to depend on their business earnings and personal debt for business financing; while men are more likely to have a business or commercial bank loan.
The new survey among 1,194 business owners (602 women and 592 men) was conducted by the National Foundation for Women Business Owners (NFWBO). The survey shows that women and men owners of fast-growing businesses - defined as firms that achieved revenue or employee growth of 30 percent or more over the past three years - are similar in that they have a larger appetite for capital than those who own slower-growing firms.
“However, only 39 percent of women who own fast-growth firms have a commercial bank loan compared to 52 percent of men owners of fast-growth firms,” noted Nina McLemore, NFWBO chair and president of Regent Capital. “One-third [32 percent] of women owners of fast-growth firms use personal credit cards to finance their firms, compared to only 21 percent of men who own fast-growth firms.”
Observes Teri Cavanagh, director of the Women Entrepreneurs Connection at FleetBoston Financial (primary underwriter of the NFWBO study), “This reliance on personal debt is holding women business owners back. The study clearly indicates that women who understand how to leverage debt and equity have a far greater chance of becoming owners of fast-growing or 'gazelle' businesses.”
Most fast-growing firms are not in high-tech fields, nor are high-tech firms necessarily fast-growing, the study concludes. Most of the high-tech-related businesses surveyed did not meet the study's criteria for fast growth. However, women are more likely to own those high-tech firms that are also fast-growing - 48 percent of high-tech firms owned by women are fast growth, compared to 28 percent of high-tech male-owned firms.
Furthermore, the high-tech-related women-owned firms are more likely to be in the fields of biotechnology or life sciences, while information technology dominates men-owned technology firms.
“Women owners of fast-growth firms are less likely to share ownership of their firms with outside investors than their male counterparts - only 28 percent of women compared to 49 percent of men share ownership,” NFWBO's McLemore added. “Women entrepreneurs should recognize that bringing in expansion capital is an important factor in achieving high growth, even if they must relinquish some equity.”
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