Small Business

Why Few Women Seek Angel Investment


Discrepancies in angel funding; gender stereotypes in Europe; the correlation between leisure time and new business ideas; and more

For Women Entrepreneurs, Seek and You Shall Receive?

When it comes to angel investment, women entrepreneurs seem to not be searching for enough sources. Less than 9% of all requests to angels comes from women-owned businesses, according to new research. But when they do seek capital, women appear to have nearly as good a chance of receiving money as male entrepreneurs—13.33% vs. 14.79% for men.

Part of the problem, say the researchers, Jeffrey Sohl of the University of New Hampshire and John Becker-Blease of Washington State University, is that women "are more likely to submit proposals to women angels."

While an obvious solution is "increasing the supply of women angels," the problem can be self-perpetuating, say the researchers. "Women angels may perceive or experience barriers to quality investment opportunities compared to men angels and thus elect to participate in the market at a substantially lower rate than do men angels," they say. Or, "women angels may participate more actively than our data suggest, but elect to do so outside of organized angel groups," which comprised the researchers' data source.

European Women Face Obstacles in Launching Businesses, Study Suggests

Prospective women entrepreneurs in the European Union "face gender stereotypes" that discourages business startups, argues a new study from two Greek professors, Thomas Poulios and Anastasios Vasiliadis. "One of the main objectives of the European Union is to withdraw the obstacles that female entrepreneurs face," the researchers say. However, "except [for] the retail sector, the hospitality business and other services, male entrepreneurs hold bigger shares in the entrepreneurship activity." The differences are especially noticeable in the e-business area, they say, and may be partly attributable to women using "new technologies less than their male colleagues." Women are also torn more by family pressures, the researchers say.

Who Says Running a Business Is All Work?

An American Express (AXP) survey of small businesses indicates that most entrepreneurs make time for leisure, and see at least one big benefit: new ideas.

Nearly two-thirds of business owners report making personal time for themselves during the business day. Some 45% consider taking time off from work to pursue a leisure activity a "guilty pleasure." More than a third of entrepreneurs report coming up with their best ideas during "down time." Male business owners are more than twice as likely as female business owners to come up with their best ideas on the way to work (18% vs. 7%). Women are more likely than men to wake up in the middle of the night with ideas for their business (70% vs. 56%).

Michigan Farmer in "Stalemate" with Local Agriculture Officials

Greg Niewendorp, a Michigan cattle farmer who earlier this year refused to comply with the state's first-in-the-nation requirement that all cattle be registered under the National Animal Identification System (NAIS), remains in legal limbo (see BusinessWeek.com, 12/19/06, "Farmers Say No to Animal Tags"). His farm was put under quarantine by the Michigan Dept. of Agriculture (MDA) when Niewendorp refused to allow the state to test his herd for bovine tuberculosis, a first step in gathering data for NAIS. Niewendorp challenges the state to "bring it on" via legal action to clarify its authority. An MDA official says the situation remains "a stalemate."

David E. Gumpert covers business/health issues and also writes the biweekly What Entrepreneurs Need to Know column.

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