Here’s why 22 female entrepreneurs just met with federal lawmakers in Washington D.C.
October 1, 2019
Only 2.5 percent of venture capital funding goes to companies with all-female founders. As a female entrepreneur, I find this extremely disheartening. My startup, an online English language platform called Lana Learn, seeks to connect with the 2 billion people learning English globally, but with limited access to capital I cannot grow my company to meet demand.
Female founders face enormous challenges, but there is hope that things are changing. On Sept. 23, I was honored to represent Seattle at the Women’s Entrepreneurship Roundtable, hosted by the newly created bipartisan U.S. Senate Caucus on Entrepreneurship in Washington, D.C. Create33, a founder center for technology startups in Seattle, sponsored my participation.
I joined 21 female entrepreneurs from across the U.S., each of us from different states and each of us at various stages of business development. We discussed the struggles we encounter in trying to grow our companies and the inequalities in funding we face.
The 2.5 percent statistic in investment of women is particularly striking when female-led companies statistically and consistently outperform male counterparts. The Kauffman Foundation reports that private technology companies led by women achieve 35 percent greater ROI, are more capital-efficient, and — when venture-backed — generate 12 percent higher revenue than startups led by men.
So, what can our federal lawmakers do about this problem?
The newly created U.S. Senate Caucus on Entrepreneurship, co-chaired by presidential candidate Amy Klobuchar (D-MN) and Tim Scott (R-SC), is comprised of six Republicans and six Democrats and seeks to address “the most pressing issues facing entrepreneurs and serve as a forum for collaboration and coordination.” In a telling statement, the Women’s Entrepreneurship Roundtable was the first meeting of the Caucus.
Noting that small businesses create two-thirds of American jobs, the senators wanted to know why small business creation was at a 40-year low in addition to learning about circumstances faced by female founders.
One entrepreneur raised the high cost of healthcare. With annual insurance premiums for small businesses at nearly $20,000 for family coverage, healthcare costs tempts her to find a job for more affordable coverage. She said that “If we shut down, it’s going to be because of healthcare.”
Another entrepreneur raised student loans. She remarked that her student loan bill is a continual stressor, forcing her to continually reconsider finding a job rather than forging ahead to create jobs with her company.
“While we have long way to go to support access to capital for women and entrepreneurs in general, I did walk away encouraged.”
The group also raised the issue of immigration. One entrepreneur noted she would like to see more H1B visas. She relies on more affordable tech talent through the H1B program. She also mentioned that access to the program should be streamlined, as small businesses often cannot compete with larger corporations to acquire H1B talent, since startup companies do not have the resources needed to navigate the complex and expensive process.
The group recognized that some government resources do exist to support female entrepreneurs, and the founders used the roundtable as a forum to share information with each other. The group relayed their experiences with federally-supported programs such as the Community Development Block Grants, the Small Business Administration 8A Program, and the Small Business Innovation Grant. The group asked the senators to seek ways to improve access to these programs. One entrepreneur mentioned her having to create three different passwords across three separate government procurement platforms to try to secure one federal grant.
As for policy recommendations, one entrepreneur recommended a tiered system for capital access. Federal-backed loans tend to come with stringent financial requirements. Perhaps there should be a different standard for businesses just starting out and with less than $1 million in revenue. Another entrepreneur suggested federal tax breaks to encourage Americans to start businesses, if we are serious about abating the 40-year low in new business creation.
While we have long way to go to support access to capital for women and entrepreneurs in general, I did walk away encouraged. I am encouraged by the creation of the U.S. Senate Caucus on Entrepreneurship and the engagement of the senators, staffers, and entrepreneurs in attendance. I am also encouraged by the work that the various organizations did to make the Women’s Entrepreneurship Roundtable a reality: The Center for American Entrepreneurship, The Kauffman Foundation, and startup ecosystems around the country like Create33.
At the conclusion of the roundtable, I recall a statement of a fellow founder. If we truly want to make change, one low cost way to do so is to provide access and awareness of the strong performance of female founders. Women need to share their stories, and that is exactly what we went to Washington, DC to do.