Women entrepreneurs find challenges, resources in Missouri

The first “Annual Survey of Entrepreneurs,” released in September, shed light on progress that has been made and challenges that remain for women-founded startups relative to their counterparts founded by men.

As one analysis of the survey data pointed out, a “gender gap” persists in the startup world, but the performance of businesses owned by women compared to those owned by men has been shrinking.

And although women entrepreneurs throughout the United States might encounter obstacles when starting businesses, Missouri has a variety of resources specifically catered to women who are interested in starting their own businesses.

Read more: During Global Entrepreneurship Week, Missouri Business Alert is looking at the contributions of the state’s women founders, who come from all walks of life and industries

Women’s ownership of businesses with paid employees is more common in Missouri than in the rest of the U.S., according to the survey, which was produced through a partnership between the U.S. Census Bureau, the Ewing Marion Kauffman Foundation and the Minority Business Development Agency.

Women own 21.09 percent of Missouri’s firms with paid workers, whereas 19.44 percent of firms with paid employees across the U.S. are women-owned, according to survey data.

But Missouri is slightly behind the rest of the country in terms of the percentage of the total female population who are business owners.

Data from the Kauffman Foundation’s “Kauffman Index of Main Street Entrepreneurship” shows that 3.85 percent of Missouri’s female population owned a business as their primary occupation in 2014. The rate of women’s business ownership for the nation was 3.88 percent in 2014, meaning that 3,880 of every 100,000 women in the United States ran a business.

Challenges persist

Women entrepreneurs across the U.S. face challenges when starting and growing their own businesses, said Emily Fetsch, a research assistant in research and policy for the Kauffman Foundation.

“There is a large capital disparity between men and women,” Fetsch said. “Women who start businesses have nearly half of the financing that men have, and women are less likely to access networks of close friends to get funding sources.”

Emily Fetsch | Courtesy of the Ewing Marion Kauffman Foundation
Emily Fetsch | Courtesy of the Kauffman Foundation

Fetsch said that while capital does not necessarily determine a business’ success, it allows entrepreneurs to be more able to scale and to make larger investments in their companies.

Another challenge women entrepreneurs face is finding childcare, said Alex Krause, program officer in research and policy for the Kauffman Foundation,

“The same time that it is typical for people to start a new company is the age when many women are raising young children,” Krause said. “It is difficult for many entrepreneurs to find work-life balance, and the challenges for women entrepreneurs are compounded when they are moms.”

Fetsch said that the discrepancy in earnings between Missouri men and women might detract women from taking the financial risk of starting a business, as women in the state might not have the personal savings to invest in their potential business.

In Missouri, women who work full time and throughout the whole year earned only 71 percent of men’s income between 2008 and 2012, according to the Kansas City-based Women’s Foundation’s “The Status of Women in Missouri” report. On the other hand, women earned 78 percent of men’s earnings nationally.

In addition to obstacles to raising capital and finding adequate childcare, some women entrepreneurs tend to not become involved in entrepreneurship groups because they do not consider themselves entrepreneurs. Rather, they see themselves as small business owners who want to be their own bosses, and they do not view themselves as being part of the romanticized startup culture, Fetsch said.

“Entrepreneurship support groups are advertising themselves as being for entrepreneurs specifically, but many women don’t identify themselves as being entrepreneurs,” she said. “Then, how likely are women to go to these groups, and how can these groups use more inclusive language to attract women?”

Resources dot the map

Missouri has several resources specifically for women entrepreneurs that supplement them with the capital and educational support they need to build and expand a successful business.

In Kansas City, four organizations — the Women’s Business Center, Women’s Capital Connection, Women’s Employment Network and WE-Lend — have created an alliance called OneKC for Women. This alliance also has partnered with other organizations that serve Kansas City-area women business owners to give them the tools they require for their businesses to flourish.

Kelly Sievers Pruneau, the network manager of the Women’s Capital Connection, said her organization’s main focus is providing equity funding for early-stage, women-led businesses.

Kelly Sievers Pruneau | Courtesy of Prunea/Facebook
Kelly Sievers Pruneau | Courtesy of Prunea/Facebook

“We are a network of women angel investors, and each investor writes her own check to the companies in which we invest,” she said. “We tend to invest in tech or biotech businesses that are expecting to generate revenues of $10 million to $20 million in five years, and we have invested in some consumer-products companies.”

The group invests $100,000 to $400,000 in any given deal, Pruneau said.

“Our mission is to fund women-led companies and to give them the opportunity to meet up with women angel investors,” she said. “It can be hard for women to get access to these investors because they haven’t built up networks of them to tap into.”

While Women’s Capital Connection gives capital to early-stage, women-led businesses, the Women’s Business Center in Kansas City supplies women entrepreneurs with educational opportunities, such as classes on how to set financial goals and how to reach target markets.

The Women’s Employment Network, on the other hand, focuses on unemployed and under-employed women, helps them find employment opportunities, and introduces them to entrepreneurship. WE-Lend is a newer addition to the OneKC for Women alliance that concentrates on providing micro-loans to entrepreneurs.

| Courtesy of Prosper Women Entrepreneurs
Women listen to a talk at a Prosper Women Entrepreneurs event in St. Louis. The organization was launched in 2014. | Courtesy of Prosper Women Entrepreneurs

Across the state in St. Louis is Prosper Women Entrepreneurs, which consists of two segments: PWE Startup Accelerator, which provides funding to up to 12 women-led startups per year, and the Prosper Institute, which offers networking opportunities and peer-advisory groups to women who are growing their businesses.

The PWE Startup Accelerator accepts applications and selects two semiannual classes of up to six businesses to fund, and it looks for women-led startups in the technology, health care technology and consumer products sectors. For the companies it selects for participation each year, the accelerator pays $50,000 for an equity position and contributes up to $100,000 in additional funding.

“The accelerator is for investment-ready women, and the institute offers programs to help growth-seeking women advance their businesses and create economic prosperity,” said Aimee Dunne, senior vice president of national programs for the Prosper Institute.

One of the programs the institute offers is Prosper Mastermind Growth Groups, in which the institute places women entrepreneurs into groups of seven to nine. Members of these groups serve as peer advisers to one another and help each other work through challenges facing their businesses. They meet quarterly with a mentor assigned to their group as well.

“Many forum-style groups for entrepreneurs are inaccessible to early-stage entrepreneurs and women entrepreneurs because they require you to have $1 million in revenue to participate,” Dunne said. “While 6.3 percent of men reach this $1 million revenue mark, 1.8 percent of women reach this mark.”

The Prosper Institute does not require entrepreneurs to generate $1 million in revenue to participate in its Mastermind Growth Groups. The organization additionally offers office-hour sessions in which entrepreneurs can meet with either members of the institute’s staff or expert mentors to discuss the challenges they are experiencing and to receive feedback.

Organizers and supporters of Columbia's new Missouri Women's Business Center pose before a ceremonial ribbon cutting at the organization's official opening ceremony on June 1, 2016. | Courtesy of Wally Pfeffer
Columbia’s Missouri Women’s Business Center held a ceremonial ribbon cutting at the organization’s official opening ceremony in June. | Courtesy of Wally Pfeffer

In Columbia, Central Missouri Community Action opened the Missouri Women’s Business Center in June to serve women entrepreneurs in eight mid-Missouri counties. The program hosts educational events and networking activities, and it also offers micro-lending and personalized business counseling. Central Missouri Community Action is funding the program in part through a grant from the U.S. Small Business Administration.

Even though Krause sees the importance of having women-targeted support organizations, such as Women’s Capital Connection and Prosper Women Entrepreneurs, she feels that they might be more of a short-term solution.

“We want to be supportive of demographic-specific entrepreneurship programs, such as business incubators for women, but we want women entrepreneurs to be equal to men,” she said. “We’re risking having women stick with their own women network, but the question is ‘How do we expose them to the larger network and make sure the solution is fair?'”

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