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Women entrepreneurs have steadily emerged as leading contenders among new business start ups. Although statistics show that the rate of women starting businesses has significantly increased over the years, women entrepreneurs are still experiencing undercapitalization.
To amend this issue, programs such as the Women-Owned Small Business Federal Contract Program (WOSB Procurement Program) have been established. The WOSB Procurement Program provides women with greater access to federal contracts. However, the program initially had monetary limitations for different types of contracts. For example, contracts regarding goods and services were restricted at $4 million whereas contracts for manufacturing contracts had a restriction at $6.5 million.
Although these monetary caps have since been removed, it is evident that women entrepreneurs have had a rocky experience on their path to equal access.
However, equity crowdfunding has become a popular fixture for not only women entrepreneurs but women investors. Earlier this year, a UK crowdfunding platform named Seedrs released statistics regarding the growth of women investors. In just nine months, the number of women investors almost doubled. Not only is crowdfunding gaining popularity, women are progressively finding it an appealing option.
With the increase of women investors comes an increase in women entrepreneurs gaining capital. A study by the Center for Venture Research found a correlation between the number of women angel investors and the number of women entrepreneurs funded by angel investors. The percentage between the two was the same—12%. Thus, the Center found that women tend to fund other women.
Equity crowdfunding gives women entrepreneurs the opportunity to find capital for their businesses and may help women entrepreneurs meet equilibrium with their male counterparts. Only time will tell how equity crowdfunding will affect women entrepreneurs in the long run but for now, crowdfunding is proving to be a strong ally among women in business.