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| Women entrepreneurs face unique challenges when starting a business. Credit: Shutterstock |
Entrepreneurship was once considered a man's territory, but each year, more and more women set out on the journey to launch and lead their own companies. These business-savvy ladies inspire other women with dreams of founding startups, but many female business owners face still face significant obstacles because of their gender. Female CEOs shared a few of the biggest challenges women entrepreneurs face today, and how to overcome them.
Women entrepreneurs think they need to act like men.
Most female business owners who have attended networking events can relate to this scenario: You walk into a crowded seminar and can count the number of women there on one hand. When women entrepreneurs have to talk business with primarily male executives, it can be intimidating.
To compensate and protect themselves, women often feel as though they need to adopt a stereotypically "male" attitude toward business: competitive, aggressive and sometimes overly harsh. But Hilary Genga, founder and CEO of women's swimwear company Trunkettes, said this is the wrong approach to take.
"Be yourself, and have confidence in who you are," Genga said. "Don't try to be a man. You made it to where you are through hard work and perseverance, but most importantly, you're there. Don't conform yourself to a man's idea of what a leader should look like."
Sharon Rowlands, CEO of digital marketing firm ReachLocal, agreed that confidence is the key to success, even when you're up against a boardroom full of men. Rowlands noted that when she was a newly appointed CEO, she often felt her ideas received more scrutiny than those from her male colleagues. However, she didn't let that discourage her from being a great business leader, she said.
"I had confidence in my abilities to run the business," Rowlands told Business News Daily. "I just made sure that any initiative I was trying to move forward was backed up by a solid business case. I was never unprepared for the questions that I knew would come. I [also] think many women naturally have extraordinary common sense, a sharp intuitive sense and a great focus on people. These are extremely valuable in business and can help to set us apart as leaders."
Women-owned startups receive significantly less investor funding.
Not every startup founder looks for investors to help his or her business get off the ground, but those who do know how difficult the pitching process can be. Raising capital is even more difficult for women-owned firms: A 2014 Babson College report found that less than 3 percent of venture capital-funded companies had a female CEO.
Bonnie Crater, CEO and founder of Salesforce performance management solution Full Circle CRM, said that venture capitalists tend to invest in startups run by people of their own "tribe" — for instance, a Stanford-educated investor will want to back a Stanford alumnus's business. This means that VC firms with female partners are more likely to invest in women-run startups, but according to Babson, that only accounts for 6 percent of U.S. firms. If a woman is looking for business investors, Crater advised building confidence through a great team and business plan.
"Investors are [typically] looking for businesses that can grow to over $1 billion in valuation," Crater said. "Think about how to do that. If you have experts on your founding team that can execute the business [operations] well, investors will have confidence in those people. [You also] need a good product market fit."
Emotions and nurturing skills can affect women's businesses.
Though trying to act like a man doesn't guarantee success for a female entrepreneur, allowing her "feminine" qualities to stand in the way of getting things done isn't necessarily recommended, either. By nature, women are more emotional and nurturing, which can sometimes be a hindrance to running a business.
"For men, a business is mostly about the bottom line, but for women, it's more than that," said Delia Passi, CEO of WomenCertified, home of the Women's Choice Award. "We get emotionally connected, and that can hold us back from making the tough decisions. Male board members and investors get frustrated when we're not as quick to fire or make dramatic business changes that could impact employees' families."
Passi noted that women also tend to place a high premium on building up relationships that they hope will naturally lead to sales. Connections are highly important to success, and nurturing strong professional relationships can go a long way. However, Passi reminded female entrepreneurs to also be direct and stay focused on their business goals.
Women often lack the support of other female business leaders.
Long before she founded online women's eyewear boutique Rivet & Sway, CEO Sarah Bryar worked with undergraduate female engineering students at the Massachusetts Institute of Technology. These "trailblazers," as Bryar described them, felt insecure about being in the minority as women who excelled in math and science, and longed for more camaraderie and support from female peers in their fields.
"The main challenge for female entrepreneurs is just like the challenge for female engineering students: There just aren't enough of us," Bryar told Business News Daily. "There aren't enough women to be role models, act as sounding boards, do deals with — in short, to create normalcy for women in leadership positions."
Despite the quickly growing number of female executives and business owners, finding fellow women entrepreneurs to connect with isn't always easy. Women-focused networking events like American Express OPEN's CEO BootCamp are good places to start, as well as online forums and groups specifically created for women in business.
"Opportunities to lead do exist for women," Bryar said. "We just need to continue to support and promote women in the limelight to encourage others to come along for the ride."
Many women have to balance raising families with running their businesses.
Work-life balance is often a goal of entrepreneurs across the board, but mothers who start businesses have to simultaneously run their families and their companies.
"Being a mother while running a business is very challenging," Genga said. "There are ways to balance your time, but the perception is that you could be more effective running your business if you didn't have to deal with kids."
Genga said she has learned to not take shortcomings on either front too seriously, and to not beat herself up over the little things, like missing a class trip with her children. "Momtrepreneurs" have dual responsibilities to their businesses and to their families, and finding ways to devote time to both is key to truly achieving that elusive work-life balance.
Women entrepreneurs are afraid of failure.
According to Babson College's 2012 Global Entrepreneur Monitor, the fear of failure is the top concern of women who launch startups. Failure is a very real possibility in any business venture, but Passi said it shouldn't be viewed as negative.
"You need to have massive failure to have massive success," Passi said. "You may need 100 'no's' to get one 'yes,' but that one 'yes' will make you more successful tomorrow than you were today."
Bryar offered similar advice for female entrepreneurs, encouraging them to work through the moments of self-doubt that every business owner faces.
"Work hard at ignoring that inner voice that may discourage taking action, speaking up or getting outside your comfort zone," she said. "It's something I struggle with myself, but I know fundamentally that I wouldn't be a CEO today if I hadn't taken chances to assert myself."
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