Women entrepreneurs are more likely to use their own credit and home equity loans

In The News

By Elisabeth Buchwald

Women who try to launch their own businesses are at a significant disadvantage compared to men, according to a report published this month by the Institute for Women’s Policy Research. The report found:

  • Men are twice as likely to receive over $1 million in funding.
  • Women are 1.1 more likely to use their own credit and take out home equity loans to finance their business.
  • Men-owned businesses are twice as likely as women-owned businesses to have either a granted patent (1.5% compared with 0.7%) or a pending patent (0.9% versus 0.4%). This decreases their chances at obtaining funding given that investors 74% more likely to raise venture capital funding to launch their business within three years, according to a 2016 report published by Joan Farre-Mensa, a professor at Harvard Business School and Deepak Hegde, a Professor at New York University’s Stern School of Business;
  • Women are less likely than men to hold intellectual property rights, yet more likely to engage in product innovations and continually update and revise their products before they bring it to market.

Venture capitalists tend to ask men about their growth aspirations and women about mitigating risks, said Jessica Milli, study director at the Institute for Women’s Policy Research and co-author of the report. Women are often expected to have “all the answers,” she added.

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