Our Advice This International Women’s Day: Have the Audacity
The Government of Canada’s theme for International Women’s Day 2024 is Invest in women: Accelerate progress. It’s a call to action and a reminder that gender equality is one of the most effective ways to build healthier, more prosperous, and more inclusive communities. Check out our 2023 Social Impact Report for updates on our ongoing Reach1000 Campaign.
Systemic barriers, including the motherhood penalty and gender biases, result in fewer women starting businesses. When they do, women-led businesses receive significantly less funding than male-led businesses, despite studies that show women make better entrepreneurs and run better businesses.
OneSpace came up against some of these systemic barriers and gender biases in a recent funding application. We’re sharing our own experience to remind other women entrepreneurs that it’s important to take criticisms within the context of the broader systemic landscape we operate in.
Above all else, we would like to remind other women entrepreneurs: Have the audacity.
Why Organizations like OneSpace are Important
OneSpace was created to help women and moms find balance and pursue their passions, by bringing together under 1 roof the basic services we need most: childcare, mental health services, and community. Why do women and moms need support like the ones OneSpace provides?
The Motherhood Penalty and lack of childcare
Research shows that “moms in the workforce are less likely to be chosen for new roles and promotions, will earn lower salaries, and be held to a higher standard than fathers and non-mothers.”(1) Moms are more likely to take leaves of absence from work after having children to assume childcare duties. Many new moms turn to ‘side-hustles’ and part-time, flexible work, rather than returning to full time work, owing in part to the lack of childcare options. Women must grow their businesses and income streams while balancing childcare considerations, resulting in a huge number of women-owned SME’s. 18% of all businesses are majority owned by women in Canada—with more than 99% of these small and medium-sized enterprises. (2)
Moms in Vancouver are particularly vulnerable to the lack of childcare. Vancouver is a childcare desert; the lack of available childcare options is often referred to as 'an invisible crisis.' On average, there are only 18.6 childcare spaces per 100 children. For those able to secure a spot, costs are high and hours are inflexible.
Access to Funding
Women are less likely to become entrepreneurs, due in large part to a lack of confidence.
Psychologically, men tend to have more hubris, encouraging them to start a business. On the other hand, women generally have more humility, which prevents them from starting a business, but when they do, they tend to be more successful than their male counterparts.(3)
Women traditionally have a harder time accessing and securing funding to grow their businesses. Women are less likely than men to receive Venture Capital funding for their businesses than men - it is estimated 98% of VC funding in the US goes to male-founded teams. Women owned businesses tend to be smaller, making it more difficult to secure credit through financial institutions. They also get less funding: the average amount of financing for men-owned businesses is about 150% higher than that for women-owned businesses. (4)
Research by BCG shows,
... the average investment in companies founded or co-founded by women was half that of what is raised by only male-founded companies. Despite the funding disadvantage, these women-owned businesses generated higher revenues than their male counterparts, and the average return on investment for women-owned companies was double that of men-owned businesses. (5)
Women and Social Change
Women are 1.17 times more likely than men to create social ventures rather than only economic ventures, and 1.23 times more likely to pursue environmental ventures than economic-focused ventures. (6) What’s more, “Most female founders are motivated by intrinsic factors like autonomy and making a difference, and they appear to have a stronger desire to contribute to society than men.” (7).
Despite barriers, women still run more successful businesses: Studies continue to show that female entrepreneurs outperform their male counterparts. (8) “Even though men have a significant advantage in raising funds, companies founded or co-founded by women do better along several dimensions than companies started by men. Women founders tend to build businesses that generate more revenues, create higher job growth, dream bigger, and execute better.” (9).
Data published by the U.S. Census Bureau, Dow Jones, the Harvard Business Review, and others from 10 private and public studies conclusively show the following:
Women-owned firms generate significantly higher revenue than male-owned firms.
Female-owned firms create significantly more jobs than their male-owned peers.
Women are more effective in Senior Leadership roles.
Women executives significantly improve company performance as compared with men.
Women have a much larger appetite for growth and success than their male counterparts. (10).
By providing the space and support for women led businesses, OneSpace directly contributes to economic growth with more socially impactful, better run businesses.
Our Own Experience
This International Women’s Day, OneSpace is sharing the feedback we received from a funding organization explaining why they would not be offering OneSpace a loan.
“Scalability and long-term profitability … uncertainties regarding the sustainability and growth potential…
Strategy for growth ... concerns about the feasibility and execution of such plans…”
Sadly, this feedback is representative of many of the gender biases, systemic barriers, and outdated cultural norms faced by women entrepreneurs every day.
Underestimating the size of a market opportunity due to its gendered nature: Despite a lack of childcare options being a pressing issue affecting millions of families across Canada, there is still a misunderstanding of the scope of the issue and the affect a lack of childcare has on the broader economy. This is tied in to the outdated tendency to consider childcare “women’s work” and underestimating the affect a lack of childcare has for women engaging in the work force. Providing flexible, affordable childcare that meets families’ needs presents a massive market opportunity and huge growth potential, yet its importance and market opportunity is still underestimated. What’s more, the number of elf-employed women in Canada continues to grow, while the number of self-employed men in Canada decreases. Market opportunity that is heavily gendered may be underestimated or outright dismissed.
Dismissing a collaborative growth model: Women-led organizations prioritize collaboration and cooperation compared to male-led organizations, an approach that actually results in better entrepreneurship. Paradoxically, a growth and expansion strategy that is heavily collaborative and aims to harness the power of community partners to expand may not be viewed as a feasible strategy for growth and expansion.
Biases towards organizations run by (and for) women: Women still face negative biases when it comes to their ability to run high performing organizations, despite mountains of evidence that point to the simple conclusion: female entrepreneurs outperform their male counterparts. Even when women-led organizations forecast and demonstrate growth, these biases still win out when it comes to funding decisions.
Outdated growth and success metrics: Traditional growth metrics used for companies run by men simply don’t reflect the growth trajectory followed by many women-led businesses. Women and mother-led companies may take a different path to growth compare to male counterparts, due in part because women still do the majority of domestic, emotional, and childcare labour, in addition to working. Growth is also affected by a lack of funding made available to women-led businesses. Women-founders also often prioritize intrinsic motivations like making a difference and contributing to society over solely making money, which is not measured on a P&L. Notably, these intrinsic motivations factor heavily into actually making a company successful.
This organization’s feedback highlights the critical need for improved access to funding for women-led organizations, using processes that remove gender biases.
A Personal Note from OneSpace CEO, Elizabeth
I see time and time again smart, capable, tenacious women who’s biggest hurdle in starting their business is a lack of confidence. Their hesitation is not surprising, given the feedback we receive on our ideas, capacity, and capability. My favourite (and most often used) advice is this:
You know what to do. Trust yourself. Have the audacity.
Footnotes:
(1) Fortune.com “Understanding the Motherhood Penalty and what it means for Working Moms”
(2) Women Entrepreneurship Knowledge Hub. (2023). The state of women’s entrepreneurship in Canada 2023.
(3) Forbes.com “Why Women Entrepreneurs Outperform Men”
(4) Women Entrepreneurship Knowledge Hub. (2023). The state of women’s entrepreneurship in Canada 2023.
(5) BCG, “Why Women Owned Start Ups are A Better Bet”
(6) Karen D. Hughes, “Global Women's Entrepreneurship Research: Diverse Settings, Questions and Approaches”
(7) Forbes.com “Why Women Entrepreneurs Outperform Men”
(8) European Chamber of Digital Commerce “Statistics Show Women are Better Entrepreneurs than Men”
(9) Forbes.com “Why Women Entrepreneurs Outperform Men”
(10) European Chamber of Digital Commerce “Statistics Show Women are Better Entrepreneurs than Men”