Startups founded or co-founded by women receive less investments than the startups founded by men, however women-led startups generate more revenue as compared to their male counterparts, says a report by The Boston Consulting Group (BCG) and MassChallenge, a global network of startup accelerators.
As per the research report article, when women business owners pitch their ideas to investors for early stage capital, they receive significantly less funding. “The investment gap is real and larger than we thought,” the report noted.
The researchers analyzed data from 350 alumni companies that had taken part in the MassChallenge program. (MassChallenge provides programming, support, and mentorship for early-stage companies, and its strong programs are designed to support women entrepreneurs.)
The research revealed the following:
- The average startup that had been founded or co-founded by women received $935,000, or less than half the $2.12 million that the male-founded companies had received.
- Despite that funding gap, the women-owned companies had generated more in revenue over a five-year period: $730,000 compared with $662,000.
- For every dollar of funding, the women-owned startups had generated 78 cents in revenue, while those founded by men had generated less than half that amount—just 31 cents.
- In this sample, if investors had put the same amount of capital into the startups that were founded or cofounded by women as they had into those founded by men, an additional $85 million would have been generated over the five-year period studied.
“It’s disappointing but not surprising that women get less in startup capital than men,” said Katie Abouzahr, a global research fellow in Women@BCG and a coauthor of the study. “Women-owned companies receive only a small slice of total venture capital funding. But what is surprising is how much more effective women-owned businesses are at turning a dollar of funding into a dollar of revenue: they generate better returns and are ultimately a better bet.”
Related Reading — 9 Schemes For Women Entrepreneurs In India
According to an another report, nearly 50% of Indian women drop out of the corporate employment pipeline between junior and mid-levels, compared to the average of 29% across Asia.
To recall, India’s $167 billion IT services industry recently got its first female head after 30 years, as Intel Corp. veteran Debjani Ghosh takes over as president of the National Association of Software and Services Companies (NASSCOM) in April.
Speaking about female entrepreneurship in India, an MSME report that 20% of every 1000 MSMEs (Micro, Small and Medium Enterprises) in India are women-owned. Although, in a separate 2016 report on Indian startup ecosystem, presented by Nasscom along with Zinnov, it was revealed that only 9% of Indian founders or co-founders are women.
India’s ranking in women entrepreneurship has always been low, so much so that it has been named in worst countries for women entrepreneurs despite of the fact revealed by a study that women entrepreneurs are better risk takers and enjoy work more than men.
In a seperate 2016-ranking report of World’s best cities for female entrepreneurs, Delhi was ranked at 22 place.
Via – GlobalNewsWire