Kauffman Report: Untapped potential holds promise to grow US Economy

Jobs and economic escalation will follow as more women break through "glass walls" to start high-growth ventures

(KANSAS CITY, Mo.) Sept. 28, 2011 —

Women who are capable of starting growth companies that serve global markets may be the nation's secret weapon for achieving sustained economic growth.

Research shows that startup companies – particularly high-growth startups – are the most fruitful source of new U.S. jobs and offer the economy's best hope for recovery. However, despite the fact that about 46 percent of the workforce and more than 50 percent of college students are female, and that women have risen to top positions in corporate and university hierarchies, they represent only about 35 percent of startup business owners. Their firms also tend to experience less growth and prosperity than do firms started by men.

"Overcoming the Gender Gap: Women Entrepreneurs as Economic Drivers," a new paper from the Ewing Marion Kauffman Foundation, explores the reasons behind lower business startup rates among women and proposes actions that would help to realize the promise of female entrepreneurs in escalating the economy.

"There are plenty of highly qualified women in science and technology – industries from which the majority of high-growth companies are born," said Lesa Mitchell, Kauffman Foundation vice president, advancing innovation, and the paper's author. "More women are entering these fields than ever before. However, while women have broken through the glass ceiling, they seem to encounter ‘glass walls' that keep them from venturing out of big companies or structured academic settings to launch their own firms at the same rate men do."

In fact, early in the startup process, women take fewer steps to position themselves to start high-growth companies, according to "Gender Differences in Patenting in the Academic Life Sciences," a landmark study released in 2006 that tracked the careers of more than 4,000 life science research faculty at U.S. universities over 30 years.

While women tended to produce research that was equal to or slightly better than men's, on average, female faculty patented their research at only about 40 percent of the rate of their male colleagues, the study showed. They also tended to rely on formal university conduits to help them commercialize their research, rather than making connections and seeking guidance from private industry. In addition to more actively reaching out to establish new networks – a critical step for would-be entrepreneurs – men had more exposure to industry earlier in the process, with 93 percent of them serving on science advisory boards of high-tech companies, as compared to only 6.5 percent of women.

Other studies show that women might be more inclined to seek work/life balance and therefore shy away from establishing innovative firms that aim for global scale. On average, they also have greater difficulty raising investment capital than men do.

Nevertheless, Mitchell says, these gaps do not represent innate gender differences. They are subject to change and already may be changing.

"Women's entrepreneurship is an economic issue, not a gender-equity issue," Mitchell said. "As more women engage as entrepreneurs to build on their discoveries, new jobs and economic prosperity will follow."

Mitchell recommends three steps to boost female entrepreneurship in the United States:

• Not-for-profit initiatives that advance opportunities for high-growth women entrepreneurs need greater funding and support from women executives, philanthropy leaders and industry. Networking and collaborative events between startup founders and big companies are critical to provide women entrepreneurs access to networks that can produce potential customers.
• Successful women entrepreneurs and inventors should make themselves visible and available. Role models are critical to young women considering entrepreneurship.
• Women must be invited at a much higher rate to join science advisory boards of high-tech companies.

To see original post and to download the full report, visit the Kauffman Foundation website: http://www.kauffman.org/newsroom/untapped-potential-for-expanding-womens-entrepreneurship-holds-promise-to-grow-us-economy.aspx

Application Deadline Extended to August 22!

We are thrilled with the response we have received to our call for applications, and many that we have spoken to have asked for a few additional days. With that, we are extending the deadline to August 22nd. If you are planning to apply, please let us know so that we can save a spot for you in our on-line screening process. APPLY NOW!

While we do accept applications year-round, companies applying in this round will on-ramp with Astia during our Silicon Valley Program October 10-15. Applicants accepted into the Astia Portfolio benefit from year-round programming, customized advisory services, leadership training, investor connections and peer-to-peer network, all specifically designed to support and accelerate growth.

All applicants receive valuable feedback from Astia community members which in turn can be helpful in growing your business, no matter what the next steps are in your relationship with Astia.

We look forward to receiving your application! Please contact kindra(at)astia(dot)org for more information.

Sharon Vosmek, Astia CEO, Video Interview: European Entrepreneurs are Not Interested in Playing Small

San Francisco, CA - July 2011


Sharon Vosmek has been CEO of Astia since 2007, originally joining as COO in 2004. As CEO of Astia, Sharon has an unwavering passion and a uniquely well-suited background to drive forward the organization's mission of propelling women's full participation as entrepreneurs and leaders in high-growth businesses, fueling innovation and driving economic growth. Under her guidance, the Astia community of investors, entrepreneurs, and industry leaders has grown ten-fold and now spans North America, Europe and India. You can find Sharon on Astia's blog and on Twitter @Vosmek

INTERVIEW TRANSCRIPT:

Pemo: I was wondering if you could tell me a little bit about Astia & how it serves the female entrepreneurial community?

Sharon: Absolutely. Astia is a global organization built on a community of experts focused on the success of women led high growth companies. This is broadly serving the community of high tech, clean tech & life sciences companies.

We work with the companies on access to capital, achieving high growth & developing the executive leadership of the women on the founding team.

Pemo: Great, fantastic. I wondered if you have access to any stats at the moment about how many female entrepreneurs get investment? Anything up to date in that arena?

Sharon: Well what's really interesting is that there's good news & bad news. The bad news is that women still secure less than 10% of venture capital. It hasn't changed much in the last 10 years. The good news, the exciting news & the real opportunity for Astia, as I see it, is that there's great research validating the reasons why we should all care.

Number one, research shows that if women had the same access to capital as their male counterparts, we would see 6million jobs created in 5 years, 2 million of those in year one alone.

That is our economic jobs recovery that we are all seeking right now. Really exciting numbers.

The other really exciting news is that companies that have women in executive leadership roles, along with men, outperform those that don't for their investors & for their shareholders. So there's really great & exciting research while we haven't yet seen the move as it relates to the percentage of venture capital going to women CEOs.

Pemo: I know that you have offerings in Europe. Can you tell me a little bit about the European scene & how that's looking now for women entrepreneurs? I've been gone a while now.

Sharon: Europe's exciting! I find the entrepreneurial ecosystem there certainly abuzz. And what is the real opportunity for Astia in Europe is that we're a global community & we have great access to serial entrepreneurs around the world. So when an entrepreneur qualifies for Astia & joins us, they actually join this peer to peer network which is really strong & can break them out of their local, social entrepreneurial norms & help them access really the high growth, global entrepreneurial opportunity.

What I find about the European entrepreneurs is that they're ready for that! They're not interested in playing small. They're very interested in playing big & I think that a platform like Astia really then enables that to go quickly.

Pemo: I know that the numbers of female entrepreneurs in Europe are smaller than in the States (even though they're small here). So I'm just wondering, are you seeing any movement in that area? Are more women starting to get on board as entrepreneurs?

Sharon: Fantastic question & interestingly globally is a front of mine. I'm actually going to participate in the APEC Conference (Asia Pacific Economic Conference) talking about women in the economy because globally women are almost half the entrepreneurs. Where we are not is in high growth entrepreneurship & that's certainly true here in the US & in Europe. And really why it matters in high growth is what I talked about with job creation. In the last 30 years all new jobs were created by enterprises less than 5 years old.

So we should want women playing in this space. It's really about getting innovation to market & job creation & wealth creation for those women.

But you're right the numbers aren't much better here than they are in Europe. And actually it's not tracked so it's a bit of data that is not tracked that we desperately need.

Pemo: Yes I guess it's a bit disparate because so many different countries are involved in Europe?

Sharon: What I'm excited about though is that I think that the message is getting out. We certainly are seeing at Astia anecdotally an increase in people reaching out to find out about us, finding how they can become involved as entrepreneurs. So we're seeing an increase in our pipeline even if we don't know if that's true in the broader market.

Pemo: Fabulous, well as you know I've always been a very strong fan of Astia & your work. I'm hoping that you continue on for a long time to come. Or hopefully maybe not?

Sharon: We actually have a pretty big goal in front of us. What we've committed to as part of a collaboration with 50 other organizations globally, excuse me 60 now, is we see the opportunity to mainstream the Astia message & really bake in an understanding of why it matters. We see that within the decade we won't need to exist as an organization. What we believe is that women are half of the MBAs, half of the college graduates, more than half of college graduates & approaching half of the Phd's.

There is an abundant pipeline of talented women at the ready. If we show them the path & the opportunity & give them access to the networks, that's all it takes for them to succeed in this space. And then Astia gets to go away!

Pemo: Fantastic! Thank you so much for your time today, Sharon. It's been brilliant getting this feedback, particularly the stats. It's really exciting news!

Sharon: Thank you Pemo & keep doing these, they are great.

Pemo: Thank you

ABOUT THE VIDEOGRAPHER
Pemo Theodore is a startup coach and founder of EZebis: Winning the Venture Game for Women. She video interviews venture capitalists & women founders on the shortfall in funding for women to raise awareness of the challenges that women sometimes face in obtaining investment in startups. She has been an Australian origin entrepreneur in online business for over 6 years since developing her other site, AstraMatch. She has been involved in small business for 33 years in Australia, Canada, Ireland & UK. A certificated business coach with the International Coach Federation, she is founding President of the Ireland chapter of the ICF & was trained by Corporate Coachu.

Astia's Kindra Tatarsky joins Incubator Summit: Choose the Right Incubator for Your Startup

Incubator Summit - Choose the Right Incubator for Your Startup - 6-21-11

Dive right in! The water is fine!

If last year’s We Own It Summit in New York was a dip of the toe in to the water to see if it was warm enough, then this year’s Summit in London was a dive in to the deep-end followed by a forceful free-style firmly charging to the finish line in 2020.

The Decade of the Woman Entrepreneur is upon us and the collaboration has firmly embraced the opportunity and the challenge this presents. The Summit participants have validated that the moment is now to propel women in to the high-growth, innovation economy – as entrepreneurs, investors, and ultimately beneficiaries of the wealth and influence created.

Our next steps have been identified in the goals below. It is now the responsibility of we, the collaborating organizations, to maintain the momentum and deliver on these shared commitments:

In 2011-12, we will:

Create and implement collaboration processes for research and training.
• The annual research agenda will work to address 1-3 questions annually. This work is critical as the current dearth of data pertaining to women high-growth entrepreneurs is pronounced and does not allow us to measure our progress.
• The training objectives ensure that women gain exposure to the opportunity of high-growth entrepreneurship, investment, and board participation. The goal this year is to create a shared curriculum - via the many that already exists within the collaboration - that provides access to networks and access to maps to success.

Communicate to the market the stories of successful women entrepreneurs and investors as well as clearly articulate the problem, issues and opportunities. This year, we will complete and publish:
• 12 profiles each of female investors & entrepreneurs.
• A statement of why women’s participation matters for key constituents (LPs, VCs, government, etc.)

Take action that we believe will create real and measurable change in the market.
• A group, led by successful VCs, angels and LPs, has been created to raise an Astia Innovation Fund to invest in women-founded, women-led, high-growth start-ups.
• Borrowing from the model used by the Indian entrepreneurs in Silicon Valley a decade ago, we will work to get women to invest in women (as well as the men who love women entrepreneurs), thereby owning the solution for ourselves.
• Where we have influence as industry leaders, LPs, Fund of Funds, family offices, VC firms, government funding agencies, etc. we will work to get women in to decision-making bodies.

The nearly 200 thought-leaders who participated in this year’s Summit have identified the above goals for the coming year as the deliverables that will lead us to the success in 2020.

And for those new to this race, the finish line has been mapped. Through this Summit and this collaboration – and any other means available to us - we will:

• Increase number of women investors.
• Increase number of women high growth entrepreneurs.
• Increase likelihood of success of these businesses.
• Get more women on public and private boards.

Come on – dive right in. The water is lovely!

Cheers,
Sharon Vosmek, CEO

‘This is a Man’s World but it would be nothing, NOTHING without a woman or a girl’ - James Brown

Guest blogger, Twain Liu on the e-G8 Summit

Let’s start with some inspiring facts before we talk about the e-G8 technology forum which is preceding the main G8 summit this week. Ada Lovelace’s partnership with Charles Babbage in the 1840s led to the invention of the world’s first computer, the Difference Engine. Adele Goldberg’s collaboration with Alan Kay in the 1970s produced a programming language, smalltalk-80, which evolved into Objective-C. This language is what now runs 180+ million of Apple's innovations such as the iPod, iPhone and iPad; innovations that contribute to Apple's bottom line success and make it the world's #1 most valued brand. Meanwhile, Dame Wendy Hall’s contributions to the original WWW as well as its latest form, the Semantic Web, over the last 20 years alongside Sir Tim Berners-Lee and others is what enables technologies to be increasingly intelligent, open and democratic for global society.

These are some examples of what’s achievable when both genders put their minds together and their hands to work in the tech sphere.

The importance of diversity, inclusion and collaboration to foster innovation, informed decision-making and economic opportunity is never more pertinent than today when technologists and political leaders from G8 countries are gathering for a two-day forum in the Tuileries Gardens of Paris, France. Under discussion will be a range of policy issues concerning the Web and mobile spaces, including: innovation, education, intellectual property, privacy and economic growth. The French President, Nicholas Sarkozy, and the advertising group, Publicis SA, are co-hosting the event, which promises to produce agenda items for the main G8 summit happening in Deauville on May 26 and 27.

What’s notable about the list of speakers and panelists at the first ever e-G8 is the sub-optimal ratio of male:female speakers and panelists (approximately 12:1) as well as the absence of representation by consumer groups and banking technologists. The latter’s omission is surprising because it would seem G8 leaders aren’t exploring ways in which technology and better quality data can be leveraged to reduce the likelihood of another global financial crisis:

• e-G8 Forum Program
• Consumer groups dismayed at business-led G8 net summit
  

Therefore, it would seem that e-G8 organizers are missing opportunities to gain more diverse perspectives as well as to tackle genuine challenges that affect ordinary citizens who use the Web and mobile Web. Moreover, women constitute a sizeable percentage of the $ spent online and the e-G8 is about economics. According to Comscore's 2010 report: "In the U.S., women make up slightly less than half the internet users but make up for it by spending 58% of the commerce dollars." Meanwhile, Nielsens reported that US mobile consumer behavior in Q4 2010 shows in an average month, women send and receive 717 SMS text messages, 30% more than the 552 sent and received by men. More information about women's purchasing power online can be read in this TechCrunch article by guest writer, Aileen Lee, Partner at Kleiner Perkins Caufield & Byers.

• Why Women Rule the Internet
  

Interestingly, regarding the under-representation of women on the e-G8 panels, French parliamentarians passed a law on 13 January 2011 to increase the number of female board directors to 20% within the next three years and 40% within six years thereafter:

• French law to increase number of women directors

It would have been commendable and encouraging if the French e-G8 hosts had led the way in the implementation of this law and invited more leading women in the technology and policy sectors to contribute to the panels and propose agenda items for discussion. A number of key organizations, including Astia, Women2.org, Catalyst and Arianna Huffington’s WIE (Women Inspiration Enterprise), could have directed the e-G8 organizers towards these women and enabled them to “sit at the big table” --- in the way that Sheryl Sandberg described in her December 2010 TEDTalk:



There are women who aren't "leaving before we leave" and are available for consideration and invitation to participate on policy panels, operational boards and media interviews about the future of technology and global society. It's the responsibility of conference hosts and organisers such as e-G8 as much as of CEO executive search professionals to show initiative and seek those talented women out.

Interestingly, there’s an emerging wealth of research which shows that when women are involved at the board level they boost the diversity of decision-making, companies excel and outperform at the bottom line. For example, Catalyst Research report from 2008 shows Fortune500 companies with 3 or more female board members produced these results:

+ 73% return on sales
+ 83% return on equity
+ 112% return on invested capital

• The Bottom Line: Corporate Performance and Women's Representation on Boards
• Building Gender Balanced Business

Obviously, the onus is also on female technologists to be proud of our achievements, to make others aware of our progress and to have the vision, initiative, drive and execution to earn those seats at the “big table”. It’s worth observing that, of the female panelists at the e-G8, Sheryl Sandberg is a rarity in that she has direct high-level operational experience at a technology company. More of her type is needed and should be fostered.

It’s vital that this and future generations of women are encouraged to pursue careers at the heart of business operations and where it impacts bottom line revenues: coding applications not only designing and marketing them; being responsible for P+L and not only in a supporting role; and, most importantly of all perhaps, making strategic revenue decisions as CEOs. In this way, when Web 3.0 happens journalists will be able to interview more female tech CEOs than they could in 2010:

• The Men and No Women of Web 2.0 Boards (BoomTown's Talking to You: Twitter, Facebook, Zynga, Groupon and Foursquare)

For inspiration, please listen to this recent NYTimes podcast and appreciate some more how women have been at the forefront of technological innovations that have increased economic opportunities and growth for all. Whilst we're at it, let's admire the women at IBM, where they recently built the IBM Watson machine that won 'Jeopardy' and showed us the possibilities of more intelligent machines to filter through all the world's online data:

• Tech Talk Podcast: Female Programmers in History
• IBM Women in WITI Hall of Fame
• A Computer Called Watson

Clearly, female engagement is what makes the difference between innovation and economic potential versus stagnation and economic impasses.

James Brown’s 1966 soul standard does tell us a truth that’s worth bearing in mind as we take a moment to reflect on how far women have progressed and how much further we still have to go. Outstanding women including Oprah, Madonna and Arianna have walked those paths to show us that women are just as capable of becoming successful media and publishing titans as the Turners, the Rolling Stones and the Murdochs.

Yet there are still opportunities and “giant leaps” to be made, particularly in the technology and policy orbits and in light of the e-G8 forum. For 2012, a key mission statement should be that the ratio of male:female panelists at the “big table” of the e-G8 should be 50:50.

As a technologist, I’d like to close with this picture.

It shows how vision and innovation are what happen when both sides of our brains (50:50) work in synch.

We become.....Conscious!

‘It’s a Man’s World, but it would be nothing, NOTHING without a woman or a girl.’

---
Twain Liu is the founder of a mobile applications company. Her technology interests include: data structures, artificial intelligence and making sense (context) of content. Her career experiences include: technology consultancy; corporate finance; Strategic Investments (TMT) and corporate strategy, CEO-Chairman’s Office, Tier 1 bank; and Zephyr.com which was acquired by Bureau van Dijk.

Women Entrepreneurs Are Trapped Within Glass Walls

Published on: May 17, 2011

By Lesa Mitchell, Vice President, Ewing Marion Kauffman Foundation

This much is known: The next round of economic recovery and growth in the U.S. will be led by new companies. The statistical evidence on that point is clear. While big, established firms employ the most people, it's the high-growth startups -- the new firms on their way to becoming big -- that create the lion's share of new jobs, and become the anchors for new industries. So it has been through every wave of growth in the country's history, from the days of Thomas Edison and Henry Ford to the IT boom of the late twentieth century.

Now here is the lesser known fact: If we want a real recovery, the next cohort of high-growth entrepreneurs cannot just be people with names like Thomas and Henry, or Bill and Steve. We need the women to get involved. The American growth engine can no longer afford to run on half of its cylinders.

Yes, women are starting plenty of new businesses. However if you look closely at the picture, as we have done at the Kauffman Foundation, where I work, you find a vast amount of potential left on the table. In our demographic data, the overall rate of entrepreneurial activity among women is less than 2/3 the rate for men.

And, as other sources along with Kauffman have found, womens' startups under-perform on key measures of growth. Comparatively, few of them even grow to $1 million per year in revenues. Very few build or hire on the kind of scale that can boost a region's economy, let alone show up on the national radar screen.

Part of the disparity stems from the types of companies many women start, such as local retail shops or professional service firms and consultancies. Serious growth and value creation tend to come from innovative startups in science- and technology-based industries. But this is where the gender gap becomes blindingly apparent.

Can you name one woman founder or co-founder who has taken a tech-based company from inception to true global scale? Several already-big firms, such as Oracle and Xerox, have women as CEOs. Meg Whitman joined eBay when it was growing and led it the rest of the way to the top, which is the closest example I can think of.

For the full post, check out “Women Entrepreneurs Are Trapped Within Glass Walls” on Huffington Post.

About the guest blogger: Lesa Mitchell is a vice president with the Kauffman Foundation. She has been responsible for the Foundation’s frontier work in understanding the policy levers that influence the advancement of innovation from universities into the commercial market and the new relationships between disease philanthropy and for profit companies. Prior to joining Kauffman, Mitchell spent twenty years in global executive roles at Aventis, Quintiles, and Marion Laboratories. Follow her on Twitter at @lesamitchell.