The American Express 2017 State of Women-Owned Businesses report showed that there are an estimated 11.6 million women-owned businesses in the United States, which employ almost 9 million people and generate more than $1.7 trillion in revenues.
Additionally, the U.S. economy nets 849 new women-owned businesses a day, with over 600 of those being minority-owned.
Those numbers sound impressive, but for certain states, the data shows a lack of women-founded high-growth businesses in tech, IT and finance.
Nebraska, for example, happens to be one of the worst-performing states for women business owners' economic clout (the state is in the bottom five) and employment viability (the bottom 10). Overall, Nebraska ranks 47 out of 50 for women’s economic clout.
But what exactly does that mean for women?
The data points to a trend of women founders entering Nebraska’s economy but experiencing low employment growth rates and a lack of power in terms of revenue generation.
According to the 2016 version of the same report, the top business sectors for women nationally are: service-based businesses like salons; administrative, support and waste-management services; and accommodation and food services.
Simply put, most women are founding non-technical, low-growth small businesses. Nebraska is home to a bustling startup and tech scene, but according to the data, that scene is not being equally led by men and women.
Nationwide, all-women-led startup teams received $1.9 billion of the $85 billion total invested by venture capitalists in 2017 according to a Fortune article reporting on data on the from M&A, private equity, and VC database PitchBook.
“Perhaps in the examples that we’ve seen, (women) are in a market that can’t get as big or are in a niche that limits its capacity to grow,” said Beth Engel, Partner at DVC. “That may mean that they’re not a good fit for (venture capital) but they could be creating a very profitable business that generates employees and creates family wealth for themselves.”
Omaha-based Dundee Venture Capital focuses on scalable e-commerce and web services businesses. The firm primarily targets Midwest-based companies that have a three- to five-year logical exit for investments.
Engel said that out of three rounds of funds, her firm has invested in six led by women: Five in their second round and a cofounding duo of women in their third round. None of their investments have been in Nebraska-based businesses, regardless of the gender of founders.
What is holding women back?
Engel said diversity based on gender is an important metric to the partners at DVC, but for her firm to invest in a business, the partners need to see the potential of $1 million or more in revenue, regardless of the gender of the founder.
“It takes someone special to be an entrepreneur, to take the risk to start one’s own company,” said Engel. “To seek funding means something. It means they’re going to grow faster and eventually have an exit or an acquisition event that would return capital to their founders.”
Engel said she knows of examples of women-owned businesses in Omaha that have grown over time to be significant in their revenue, but getting women in Omaha (or the Midwest as a whole) to the point where they’re seeking high-growth business ownership at the same rate as men is not a simple problem to solve.
“We do have the capital here, I do think we have the talent here, and if you know your customer base, your customers could be here too,” said Engel. “So I don’t know what’s holding people back. Is it that there are other jobs here and one simply doesn’t have to start a company? Is there something about the security? Is there something about (the lack of role models)?”
For women founding tech businesses, a lack of role models is something very real.
Shonna Dorsey, founder of Interface: The Web School and vice president of business development and tech talent at AIM in Omaha, works to provide women and girls with business and tech education mentors around Omaha.
Dorsey said having mentors helped open doors for her in the world of entrepreneurship and tech-based business ownership.
“If we look at where we’ve been and where we are, there’s a lot of progress,” said Dorsey. “It’s not going to change overnight or be quick but I think talking about it and having these conversations is important. It is also important that we continue to do the work and make it easier for those who come after us.”
Mentorship isn’t a cure-all for the under-representation of women in high-growth business leadership, but young and emerging talent need examples of other women in science, tech, IT and finance fields in order to understand what’s possible.
“I think it’s hard to imagine doing that if you don’t have an example of it,” said Engel.