WOMEN WEIGH RISKS AND REWARDS WHEN FACED WITH ENTREPRENEURIAL OPPORTUNITY Measures of attitudes, beliefs, and perceptions in the Global Entrepreneurship Monitor (GEM) help us understand how men and women see entrepreneurship differently. The 2017 Babson-sponsored U.S. GEM report finds that 59 percent of women entrepreneurs perceive opportunity, the highest rate ever recorded by GEM, but their entrepreneurial intentions are not trending upward—yet.
Women aren’t less likely to see themselves as entrepreneurs simply because they lack overall confidence. They’re responding to messages they receive from the world around them about who is and isn’t supposed to lead and take risks.
The Gender Gap When it comes to perceived startup capabilities, fear of failure, and entrepreneurial intentions, GEM finds a significant gender gap. Women’s perceived capability has decreased, making the large gender gap even wider in the past few years. Women’s fear of failure has been tracking higher than that of men’s for a decade.
– SUSAN DUFFY, EXECUTIVE DIRECTOR OF CWEL AT BABSON
And, finally, women’s entrepreneurial intentions, or the “intentionally planned behavior ... to start a new business,” have remained the same for the past few years while men’s are increasing. When we look at these measures together with women’s increased perception of opportunity, we are presented with a complicated narrative about women’s entrepreneurship. What is uniquely shaping women’s entrepreneurial perceptions and beliefs?
An Ecosystem Problem The Center for Women’s Entrepreneurial Leadership (CWEL) at Babson helps us better understand the implications of the ecosystem. Given these messages and the observations that women are making about who starts companies, who invests in them, and who receives funding, it is no wonder that their increased perception of opportunity does not automatically translate into increased entrepreneurial intention, especially when they may already have career opportunities that meet their needs. When faced with the realities of entrepreneurship, women may evaluate the pros and cons and simply choose not to start.
Biases and Behaviors In “A gendered look at entrepreneurial ecosystems,” Babson’s vice provost of global entrepreneurial leadership Candida Brush, and co-authors, explain
that there are many aspects of the ecosystem that relate to and can impact self-efficacy, or “the confidence—not the competence—that we have what it takes to be successful.” Institutions, organizations, and individual players, including role models and mentors, can help or hinder women-led venture creation. One example of a gendered institution is venture capital financing. In a survey conducted by the Diana Project™, businesses with all-male teams were more than four times as likely to receive VC funding as businesses with even one woman on the team. There is potential for this to change. New investing platforms designed for women, networks of female angel investors, and VC firms are not only creating access to capital for early- and seed-stage women entrepreneurs, but also educating and developing a cohort of women investors. This is particularly significant when you consider the impact this new cohort could have on the decision-making process. According to the Diana Project, VC firms with women partners are more than twice as likely to invest in companies with a woman on the management team and almost four times as likely to invest in companies with women CEOs. Gender comes to life in work organizations as well, through assumptions and
6 WOMEN WEIGH RISKS AND REWARDS WHEN FACED WITH ENTREPRENEURIAL OPPORTUNITY