Examining today's gender gap between female and male entrepreneurs

December 3, 2014 8:42 am Published by Leave your thoughts

While the Great Recession has been formally over for years, the economy's sluggish and uneven recovery has evoked an equally sluggish and uneven sense of optimism from consumers and business owners alike. Interestingly, though, a new survey reveals that female entrepreneurs in today's market feel considerably more optimistic about the economy than their male counterparts do.

The latest Spark Business Barometer Survey, conducted by Capital One, highlights that 63 percent of female business owners rate the current economy as being in excellent or good condition, compared to just 52 percent of male business owners. Conversely, more men than women entrepreneurs — 46 percent vs. 35 percent — have a negative view of the market and rate its conditions as fair or poor.

"One of the things we've seen is just continued positive sentiment around the economic outlook," says Keri Gohman, Capital One's head of small business banking, in an official statement. "Both women and men view current business conditions as improving."

And while the majority (57 percent) of small business owners, both men and women, view the economy as improving and looking to only get better next year, there's no denying that the numbers support a definite gender gap in economic perceptions. So why exactly are female entrepreneurs having a more favorable perspective of the market?

According to Gohman, one-third of business owners today are women, and that number is growing at 1.5 times the national rate. With increasingly more female entrepreneurs entering the market, it stands to reason that just by virtue of opening and growing startups of their own, many women are enjoying opportunities that they've been historically denied. On the other hand, male business owners, who faced no such discrimination before, have more to lose, influencing their negative views of the economy.

"Women are saying their financial condition is better than it was about a year ago," Gohman adds. "About 40 percent said it's better than a year ago compared to 32 percent of men."

Additionally, much of the female entrepreneurial growth is occurring in the ecommerce and digital sectors of the market, which are seeing some of the highest levels of economic activity. In this case, many women business owners could have more benefits to reap simply because more of their startups are in already-thriving areas of the economy compared to male business owners.

Bloomberg BusinessWeek also notes that tech startups run by women are considerably more "capital-efficient" than ones run by men, seeing a 35 percent greater return on investment and a 12 percent higher revenue stream.

In spite of this relative higher level of positivity and success enjoyed by female entrepreneurs, women continue to remain the minority in the startup world. As Forbes contributor Candice Hughes writes, women only lead 3 to 5 percent of startups today.

This disparity is especially disconcerting considering the increasing level of credentials exhibited by this new wave of female entrepreneurs. According to Bloomberg, the average age of women who launch their own tech startup has fallen from 42-years-old to 31. Additionally, the number of women business owners with graduate degrees has grown from 40 percent to 56 percent. In fact, more than half of all bachelor's and master's degrees, and slightly less than half of all doctorate-level degrees, throughout the country are held by women.

So while a gender gap in the number of male to female business owners continues to linger on, that gap is slowly but surely shrinking, with more optimistic, successful and qualified female entrepreneurs entering the market in droves, currently owning nearly 13,000 of 200,000 businesses throughout the United States.

Male or female, if you decide to open a startup of your own, make sure you have a small business attorney by your side that can help you navigate around legal matters and best represent your interests.

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