Did you know our Harbour Club community comprises 90% men, but the 10% of females in the community do way more deals as a percentage of membership? They are incredibly active, and they’re quite dynamic. Women seem to be able to do deals better. There are many theories as to why, mainly around empathy, rapport, the ability to build trust with potential target companies. I don’t have a scientific explanation for why that is; I just know that women tend to be better at doing deals and better entrepreneurs, and we need more of them in business.
In a previous blog, I discussed why enabling entrepreneurs to become wealthy will benefit our society. Entrepreneurs have the opportunity to use their creative problem-solving paired with capital to solve much more significant problems that plague humanity. The democratization of wealth is about equality of opportunity, which at the moment is not there for women. I believe we can solve this problem by encouraging more women to go do deals.
Inequalities in Business Are Apparent
When comparing men and women in the business world, some inequalities come to light. For example, according to the World Economic Forum in 2019, for every dollar a man gets earns, a woman, on average, only gets paid 54 cents.
Inequality also exists in the venture capital space. In an experiment by researchers from Harvard, MIT and the Wharton School, they pitched the same idea to investors and only the voice of the presenter was changed. More than two-thirds of investors preferred to invest in the male voice’s pitch.
This statistic stands in striking contrast to research showing that female-founded and co-founded startups tend to perform better than all-male ones. A McKinsey Global Institute study found that advancing women’s equality could add $12 trillion to the global economy by 2025. In a best-case scenario, that number could jump to $28 trillion. Historically, women have been severely underestimated by investors, though they have proven to attain superior outcomes.
Untapped Female Potential in the Business World
Entrepreneurship fuels economic growth, with new and young businesses accounting for nearly all new job creation. By more women acquiring businesses and creating environments for them to succeed, there’s great potential to improve everyone’s economic opportunities.
Worldwide economists search for solutions to improve global poverty conditions, many have determined that entrepreneurship is often the easiest way to do that. There are only seven countries worldwide where women are even close to participating in acquiring businesses in correspondence with men. Even in countries where women own a substantial portion of businesses, they tend to perform below companies owned by men. For example, in the United States, women own about 30 percent of the companies currently operating but only employ around 6 percent of the workforce. By helping women worldwide start and succeed with their businesses, I believe the danger of global poverty can begin to decline. Additionally, if more women had equal access to deal opportunities and could accumulate wealth, the gender wealth gap could begin to reduce even further.
As I mentioned earlier, I don’t know the scientific reason women tend to be better at doing deals than men, but it’s clear that others worldwide have recognized the same trend. According to a 2015 study by the Kaufman Foundation:
- Women bring the unique skills that set them apart from their male counterparts and allow them to thrive as successful business owners.
- Women have a more nuanced view of risk, identifying more strongly than men as financial risk-takers while remaining concerned about “foolhardy risks.”
- Women display greater ambitions to become serial entrepreneurs than their male counterparts.
- More broadly, an increase in the number of women in business leadership positions is correlated with increased business returns and payout ratios.
The Future is Female
As the global economy continues to develop and diversify, we should be asking ourselves: what can be done to support women acquire and thrive in businesses worldwide? In my experience, I have noticed women are faced with three specific obstacles: funding, mentorship, and experience. At the Harbour Club, we address those three topics and more to empower our members, including women, with the tools and tactics to enable them to buy, sell, and financially engineer businesses without the need for any capital or taking on any debt.
I want to encourage women who currently own a business and haven’t thought about buying and selling businesses to scale their existing company or create wealth to explore the topic. Your fellow females are hitting it out of the park, and there is no reason you can’t too. If you’re interested in learning more, please join us at the Harbour Club. It would be great to have more women in the community doing deals and democratizing wealth. We have made significant steps for women’s equality in business over the last 100 years, but there is still more to do. If we can democratize wealth and allow women to have their piece of the pie, maybe they will be the ones who eliminate inequality for good.
This article was originally published here: https://www.jeremyharbour.com/why-the-world-needs-more-female-entrepreneurs/