Women-owned businesses are just as financially strong and creditworthy as the average U.S. firm, according to the Washington, D.C.-based Center for Women's Business Research. Yet women struggle more than men to acquire equity capital.
Why? According to a 1999 survey, only 9 percent of institutional investment deals and 2.3 percent of dollars among the investors surveyed went to women-owned firms, the Center discovered.
HBS professor Myra M. Hart, an authority on entrepreneurship—especially the founding of high potential new ventures—is examining why this is so and what to do about it. Hart recently sat down with HBS Working Knowledge to share her latest thinking. [See] her new book, Clearing the Hurdles, co-written with Candida G. Brush, Nancy M. Carter, Elizabeth Gatewood, and Patricia G. Greene . . . .
HBS Working Knowledge: What does the venture capital landscape look like for women?
Myra Hart: Let's start with, "Who do women entrepreneurs know and who knows them?" In spite of the fact that women are very good at networking, the reality is that they don't know many people in the financial community. My colleagues and I developed a hypothesis that if there were more women who were venture capitalists then there would be more points of intersection with women entrepreneurs. In our research using information from 1995 and 2000, we documented all the women in the venture capital industry who were on a management track. Our research indicated that the actual number of women in the industry grew by several hundred in that five-year period, but the percentage of women in the industry did not grow. . .
