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Although women-owned businesses are the fastest growing segment in the US economy, there are some significant obstacles that women entrepreneurs have to face, especially those pursuing a high-growth pathway.
=Limited Access to Capital=
In the area of capital, studies find that women do not get sufficient access to loans and venture capital. Women owners start with almost half of the financial capital than men owners and raises less money when businesses grow. According to a report published by National Women’s Business Council,On average, men start their businesses with nearly twice as much capital as women ($135,000 vs. $75,000). This disparity is slightly larger among firms with high-growth potential ($320,000 vs. $150,000), and much larger in the Top 25 firms ($1.3 million vs. $210,000), where “Top 25” represents the largest 25 firms for each gender, as measured by employment[https://www.nwbc.gov/sites/default/files/Access%20to%20Capital%20by%20High%20Growth%20Women-Owned%20Businesses%20(Robb)%20-%20Final%20Draft.pdf]. [[Image:Women_access_to_capital.jpg|frame|Histogram of start capital by gender]]
In terms of loans and funding, statistics show that women account for only 16 percent of conventional small business loans and 17 percent SBA loans, even though they represent 30 percent of small firms. Of conventional small business loans, women only account for 4.4 percent of total dollar value of loans from all sources. In other words, just $1 of every $23 in conventional small business loans goes to a woman-owned business[http://www.microbiz.org/wp-content/uploads/2014/07/21st-Century-Barriers-to-Womens-Entrepreneurship.pdf].
*Women-owners are more likely to be turned down for loans with less favorable term than men, and some women do not apply for loans simply because they fear being turned down[http://ftp.iza.org/dp3718.pdf].
*Differences in loan approval rates for men and women-owners might be explained by differences in business credits, firm size and business growth potential. Women owners tend to have lower business credit scores compare to men owners[https://www.questia.com/library/journal/1G1-63794901/access-to-capital-and-terms-of-credit-a-comparison].
*Women owners use different sources of financing relative to men. Women are more likely to launch their businesses with large amounts of owner-provided equity and smaller amounts of outsider equity and outside sources of financing such as bank loans, angel investments and venture capital for their business ventures[http://poseidon01.ssrn.com/delivery.php?ID=381025121008120087104024019003087103121054040082031043106002102107085112081087083030118030122121033051020122116005026064106085028008022092000016078101075101094076004051082006101022115084095108107083024004005093086079095107125116074121024021005096125&EXT=pdf]. This might be explained in two ways. On the one hand, women appears to use outside financial sources less frequently may suggest that is their preference. On the other hand, the less frequent outside financial utilization can be seen as women are more likely to be turned down for outside financing or do not apply for outside financing because they fear being turned down.
*Women owners are more risk averse than men, especially on financial risks and business ventures.
*Women owners face lending discrimination when they operate in national instead of local markets. Study shows that women-owned businesses are viewed as more risky than white men owned businesses operated in the same market with the same observable credit characteristics[http://www.sciencedirect.com/science/article/pii/S0094119007000320].
Partly due to the financing and funding problem, women-owned firms are typically smaller than men owned firms. Average sales, assets, profits and employment for women owned firms are much lower than men-owned firms, and have grown in a slow rate. only 3% of majority women-owned businesses have revenue over $1 million compare to 6% of majority men-owned business. The average revenue of women-owned firms is 27% of the average revenue of men-owned firms, as of 2008[https://www.nwbc.gov/sites/default/files/growthpap.pdf].
Although a notable amount of existing programs provide useful services and good foundations through the early stages of business, there is a lack of offerings beyond these services. The need for women entrepreneurs pursuing high growth pathway(especially those transitioning from lower growth to high-growth strategies), however, tend to be more sophisticated and complex. These businesses need special mentoring at their critical transition phases. Women-owners in high-growth ventures often experience working capital deficiencies, lack experienced personnel, lack the internal processes and systems that enable scalability and may also face complex international matters. Moreover, these problem may be amplified for women-owned businesses because they tend to be smaller in size with less debt equity, have fewer employees, and have fewer networks to leverage[http://www.swc-cfc.gc.ca/initiatives/ep-ce/ep-ce-en.pdf]. Mentoring programs can give significant assistance to those fast growing companies that are facing greater market and organizational complexity and seeing new opportunities for growth.
Women entrepreneurs with high-growth firms require affordable, customized support services. They require committed mentors, who are experienced business leaders available to answer urgent questions and minimized unnecessary risks. These services are scarce in our current ecosystem.
Work-life balance is a challenge for many entrepreneurs regardless of their gender, but mothers who start businesses may have dual responsibilities to their businesses and to their families. Finding a way to balance the two is not easy.
Mompreneur is a neologism defined as a female business owner who is actively balancing the role of mom and the role of entrepreneur. A 2011 MSNBC article declared the rise of the mompreneur to be a hot trend in the small business sector[http://www.nbcnews.com/id/40969268/ns/business-small_business/t/successful-mompreneurs/#.V1ryQvkrLRY]. Most of mompreneurs are self-employed since self-employment promises more flexibility than wage earning occupations in which hours of work are rigid. And internet allowing mompreneur to sell products out of the home.
=Overcoming the Challenges=
Congress has focused on improving and expanding SBA-backed small business lending programs. Women are three to five times more likely to be approved for an SBA-backed loan than a traditional loan[http://www.microbiz.org/wp-content/uploads/2014/07/21st-Century-Barriers-to-Womens-Entrepreneurship.pdf]. Through the [https://www.sba.gov/about-sba/sba-initiatives/small-business-jobs-act-2010 Small Business Jobs Act], Congress increased the maximum SBA Microloan amount from $35,000 to $50,000, which has given women-owned businesses access to more credit to start and grow their businesses.
Capital program from [http://www.toryburchfoundation.org/about/ Tory Burch Foundation] with Bank of America offers access to affordable loans through Community Lenders to women entrepreneurs.
Goldman Sachs launched [http://www.goldmansachs.com/citizenship/10000women/news-and-events/10kw-progress-report/progress-report-full.pdf 10,000 Women] to provide women entrepreneurs around the world with business management education, mentoring and networking, and access to capital.
There are more women investors looking for women-led companies and supporting young and less experienced women entrepreneurs. Here is a [http://blog.girltank.org/angel-investors-looking-for-women-entrepreneurs/ list] of angel investors focus on supporting women entrepreneurship.<!-- flush flush --><!-- flush flush --><!-- flush flush --><!-- flush -->
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