New study shows only 5.6 per cent of women run their own business in the UK – a gender gap equivalent to more than 1 million fewer female entrepreneurs. Closing this gap could add an additional £250 billion in Gross Value Add to the UK economy, equivalent to 4 years of economic growth.
The recent Rose Review, commissioned by The Treasury, exposed the fact that only 5.6 per cent of women run their own business. Further data shows that women are half as likely as men to start a business: despite the many benefits that self-employment offers, such as flexible working and being able to self-manage their business culture.
Based on the Parento Principle and pioneered by Google, the ‘20% time’ initiative, where employees spend a fifth of their paid working time on their ‘side hustle’, has helped more and more people think about their ‘hobby’ as a business that sustains them.
It is widely accepted that the future of work will be one where people have multiple jobs: as a consequence of the ease and profitability entrepreneurship delivers, as well as the challenges AI and disruptive technologies bring to job stability.
Multiple jobs give you the flexibility to fluidly move with economic and social changes. According to an HP survey, Agile is the new normal.
Our research at Crowdfunder found fear of visibility, isolation, self-belief and mansplaining(!) were also barriers to women’s progress as entrepreneurs.
But what we have learnt over the last 6 years is that…
Women make great crowdfunders
Crowdfunding is an incredibly useful mechanism for understanding world socio-economic trends and predicting future patterns. We had a surge in Craft Breweries campaigns in 2015 and zero waste shops starting in late 2018.
In the last couple of years our politically focused awareness campaigns such as Led by Donkeys, Trump Baby, People vs Air Pollution and I am an Immigrant all reflect how disenfranchised people are feeling by politicians.
We started to recognize the link to crowdfunding with female entrepreneurs a few years ago. Although application rates for Crowdfunder campaigns are fairly equally divided between the genders, the success rate of a campaign is biased towards women, in the last 12 months 52% of successful project owners were female.
Take into account the bias we see in business where men outweigh women as entrepreneurs by 66%, we can safely say that women make great crowdfunders! There are some other interesting trends in these statistics.
- Female led campaigns tend to pitch for less money. They look at work and life holistically where as men tend to compartmentalize. 2019 research by jobs site CV-Library showed that women are less likely to ask for a pay rise, placing more emphasis on negotiating flexible hours.
- Women are more collaborative and happier to ask for help. Over a decade ago The Brain Magazine debated an analysis of the flight vs flight response, concluding that women have a third response, the ‘seek assistance response’, which stems from evolution and women’s need to protect their offspring.
- Women also learn more efficiently from other successful projects. Women tend to be much more open to learning from previous successful projects they relate to.
They put their egos to one side, gather information, listen and learn from others, adopting the tools they need to bring their idea to life. They value and utilise the community support that crowdfunding offers.
Crowdfunding supports entrepreneurs
Crowdfunding is transparent. It includes minorities and disparate groups that may otherwise experience more barriers in getting their voice heard. Crowdfunder doesn’t choose what the projects are that people want to fundraise for, the crowd decides by backing the idea. Gender biases are massively reduced. The crowd is in effect ‘the client’.
The Matched Crowdfunding Report 2017 revealed that 91% of crowdfunding project supporters valued the transparency crowdfunding offers. They feel in control of the ROI on their investment. With people losing their trust in institutions around the globe, transparency has become a key value to encourage people to commit to a cause.
A recent study of over 200,000 people across 200 countries showed that women are naturally more honest. The author of the study Professor Roger Steare explains “Women prefer to make their decisions based on how it impacts others – which tends to produce better decisions – while men have a more individual approach and are more self-interested.”
The future of entrepreneurship is undoubtedly female. Small steps, giant leaps.
Simon Deverell is Founder and Creative Director crowdfunder.co.uk.
Back Her Business is the first ever female focused crowdfunding platform. Offering events, mentoring and coaching support and financial incentives to break down that gender gap and help women deliver their dreams.