According to the National Women’s Business Council, as of 2021, women own approximately 38% of all businesses in the United States. (1). Other research shows Canada (3) and Europe (2) paint a similar picture. However, this percentage includes non-employer (such as freelance) business. If you were to exclude these, the numbers are even worse, and drop to as low as 17%. And in addition the distribution of ownership is not evenly distributed across all industries. For example, women own a larger share of businesses in sectors such as healthcare and education, while they are underrepresented in industries like tech and manufacturing.
Additionally, it’s important to note that women-owned businesses tend to be smaller, on average, than those owned by men. According to data from the U.S. Census Bureau, women-owned businesses have lower revenues and employ fewer people than those owned by men. This is likely due, at least in part, to the fact that women-owned businesses face more challenges when it comes to accessing capital and other resources.
Access to funding
According to a 2021 report by Crunchbase, women founded just 22.5% of tech startups that received venture funding. This is a significant underrepresentation, given that women make up roughly half of the population.
The report also found that women-led startups received just 2.3% of total venture funding in 2021. This is a small fraction of the total amount of venture funding that was available, and suggests that women-led startups may face more difficulty securing funding than those led by men.
Other studies have also found that women-led tech startups are less likely to receive funding than those led by men. For example, a 2019 report by First Round Capital found that just 2.7% of the startups in their portfolio had a female founder, and that these startups received just 8% of the total funding provided by the firm.
Overall, the data suggests that there is a significant underrepresentation of women in the tech startup ecosystem, particularly when it comes to founders and those who receive venture funding.
Why are women in tech important
There are several reasons why it is important to have more women in tech:
- Diversity leads to better outcomes: Studies have shown that diverse teams are more innovative and perform better than homogenous ones.
- Tech represents a large and growing sector of the economy: The tech industry is a major driver of economic growth and job creation. By not fully utilizing the talents of half of the population, we are missing out on a significant source of potential innovation and economic development.
- The lack of women in tech has negative consequences for women: The tech industry has historically had a low representation of women, which can create a culture that is unwelcoming to women and can make it difficult for them to advance. By increasing the number of women in tech, we can help create a more inclusive and supportive environment.
- It is a matter of fairness: Women should have the same opportunities to succeed in any field, including tech. By working to increase the representation of women in tech, we can help create a more equal and fair society.
When we focus on leaders in tech, what are the major hurdles women experience when creating a SaaS business?
There are quite a few hurdles that women may face when creating a SaaS (Software as a Service) business:
- Access to capital: Women-owned businesses, on average, receive less funding than businesses owned by men. This can make it more difficult for women to get the capital they need to start and grow their SaaS businesses.
- Gender bias: Unfortunately, women may face bias and discrimination when trying to start and grow their businesses. This can include being less likely to receive funding or being taken less seriously by potential customers or partners.
- Work-life balance: Many women entrepreneurs struggle to balance the demands of running a business with their personal commitments, such as caregiving. This can make it more challenging to find the time and energy to devote to growing a SaaS business.
- Limited networks: It can be more difficult for women to build the networks and connections that are often crucial for success in business. This can include things like access to advisors, mentors, and potential customers or partners.
- Limited representation: The tech industry, and the SaaS sector in particular, have historically had low representation of women. This can make it harder for women to find role models and mentors, and can create a culture that is less welcoming to women.
Ways you can support women in tech?
There are however, a number of ways that individuals and organizations can support women in tech:
Provide mentorship and sponsorship:
Women in tech can benefit from having mentors who can provide guidance and support as they progress in their careers. Sponsorship, where a more senior individual advocates for the career advancement of a junior employee, can also be particularly helpful for women.
Offer flexible work arrangements:
Many women in tech face additional responsibilities outside of work, such as caregiving. Offering flexible work arrangements, such as the ability to work from home or adjust one’s schedule, can make it easier for women to balance their work and personal commitments.
Encourage girls to study STEM subjects:
One way to increase the number of women in tech is to encourage girls to study science, technology, engineering, and math (STEM) subjects from an early age. This can be done through educational programs, STEM clubs, and other initiatives that promote interest in these fields.
Promote diversity and inclusivity:
Companies can create a more inclusive culture by actively promoting diversity and taking steps to address any unconscious biases that may exist. This can include things like diversity training and creating Employee Resource Groups (ERGs) for underrepresented groups.
Support women-led tech startups:
Investing in and supporting women-led tech startups can help create more opportunities for women in tech and encourage more women to enter the field.
Get in touch
As a female founder I have experienced my fair share of hurdles on the way of building a business. If you are building one right now, some of my experiences might be of value to you. Feel free to get in touch, I love to hear what you are working on.
And yes, you should be damn proud your business is women owned. So show it to the world with an awesome little badge you can use on your website for free.
(1) That number is approximately 20% if you do not include women-owned nonemployer firms. Women make up about 40% of the nonemployer (freelance) firms in the US.
(2) According to data from the European Union, as of 2021, a survey found that while women make up 52% of the total European population, only 34.4% of the European Union (EU) are self-employed and 30% of start-up entrepreneurs are women.
(3) According to data reported the Canada Government in 2021, on small and medium-sized enterprise (SME). In December 2020, women were majority owners of only approximately 16.8% of SMEs in Canada.