Why are more women leading social businesses?
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Version 0 of 1. It looks like social enterprise must be doing something right to foster gender balance in its leadership and workforce. The social enterprise model continues to attract women in ever-greater numbers: 38% of social ventures are now led by women, while there are more than twice as many men than women in conventional business. So why are more female entrepreneurs choosing social enterprise over traditional business models? Exploring the differences between men and women in launching start-ups could help shine a light on the issue. Experts at UnLtd describe the successful social entrepreneur as being innovative, opportunistic, passionate, focused, a good communicators, a calculated risk taker, impatient, tenacious, a strong leader and resourceful – as well as having specific expertise in their chosen area and strong self-belief. Meeting every one of these criteria is rare. There are endless combinations of these traits, which are certainly not gender specific. Several studies state successful entrepreneurs are similar in most respects, regardless of gender. However, the majority of evidence (research-based and anecdotal) points to some differences between men and women when it comes to enterprise. Approach to risk and growth: Men tend to do more research identifying business opportunities, are more likely to start a business with profits in mind, and have higher expectations for their business in terms of money, size and rate of growth. Thinking big and embracing risk is more common amongst male entrepreneurs. Women often launch businesses to gain a better balance in their work and family life: wealth is not the primary focus or driver. Women tend to prefer lower risk opportunities, sticking with smaller returns, fewer employees and a more geographically localised customer base. Despite more limited growth trajectories, female owners are more likely to earn positive revenues and offer employees family-friendly benefits, such as flexi-hours, job sharing and remote working. Accessing Finance: According to studies, almost half of women (45%) report access to finance as a barrier to launching an enterprise, compared with 36% of men. Male entrepreneurs are more inclined towards seeking investment externally by approaching venture capitalists or banks, which results in acquiring more capital to finance their businesses. Venture capital continues to be male-dominated, with venture capitalists investing primarily in tech-based firms, which are less likely to be founded by women. Women launch their businesses with significantly smaller amounts of capital than men and prefer internal sources of equity for their businesses – borrowing from family and personal networks, or relying on grants. Evidence also suggests that external funding is limited by the relatively small number of female angel and capital investors, which further precludes women from gaining capital using these avenues. Confidence: The RBS Women in Enterprise report defines entrepreneurial capital as a combination of human capital (education, experience), social capital (networks) and financial capital (income, savings, collateral). According to the report, women typically enter business ownership with lower levels of entrepreneurial capital overall. Combined with an absence of relevant female role models, women tend to have lower self-confidence, even compared to men with similar entrepreneurial capital. Looking at the characteristics of the model – it's reputation for collaboration and innovation, the aim of creating positive outcomes for staff, customers and communities, and the growing popularity of alternative democratic funding sources such as crowd funding – it's clear why starting a social venture is attractive to both genders. So why is acknowledging these differences significant? The differences can serve to explain why social enterprise appeals to the way women want to do business. It also helps identify and address barriers that may still be holding women back, and this is key to shaping how we encourage women into the sector and support them effectively once they take the plunge. The social enterprise sector's contribution to the UK economy is valued at more than £24bn. By supporting female social entrepreneurs in the right way, we'll be supporting the growth of the sector too. <em>Jasmine Kubski and Michaela Skodova run the </em><em>Women in Social and Environmental Enterprise Project</em><em>, a national scheme to support women to start green and social enterprises</em> <strong>This content is brought to you by Guardian Professional. </strong><strong>Join the social enterprise network</strong><strong> for analysis, best practice and the latest job vacancies</strong> Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |