Investing in Women Small Business Owners and Entrepreneurs: An Opportunity We Just Can’t Miss

April 06, 2016

“There is an enormous untapped investment opportunity for venture capitalists smart enough to look at the numbers and fund women entrepreneurs.”- Dr. Candida Brush, Arthur M. Blank Center for Entrepreneurship Babson College.

I’m not a venture capitalist, and DRA isn’t an investment firm, but we at DRA are not ones to miss a good opportunity, which is why DRA works to invest in the women and girls of the Delta region. We are actively backing women in our region by supporting their small business growth and providing them with resources to be successful entrepreneurs to improve the economic climate for them and their families.

According to the Southern Rural Black Women’s Initiative’s recent report Unequal Lives: The State of Black Women and Families in the Rural South, “individuals and families experiencing the deepest levels of poverty are found in the most persistently poor counties… including the Mississippi Delta.” In DRA states, women live in poverty at rates much higher than men. In Mississippi and Louisiana, 24% of women live in poverty compared to 17% of men.  While those numbers are startling, they are even starker for women of color. In the South, 25.5% of African American women, 23.4% of Hispanic women, and 20.9% of Native American women live in poverty, while 12.1% of white women experience similar conditions. 

Additionally, in 2014, the average woman working full-time, year-round earned just 79 percent of what the average man working full-time, year-round earned. For Hispanic women this number drops drastically to 54 percent and for African American women it drops to 63 percent. Additionally, women are less likely to be offered retirement plans or health insurance as part of their employment packages. 

Despite these realities, women in our region are excelling in areas like small business ownership and entrepreneurship, especially women of color. Owning a business allows most women the schedule, flexibility, and control over work-life balance they desire. Business ownership also serves as a way for women to avoid discrimination in the workplace. As of 2012, there were almost 10 million small businesses owned by women in America. Between 2002 and 2012, the growth rate for the number of businesses that were women-owned far outpaced that of men-owned businesses in every southern state.  

Companies with a female founder outperform all-male teams by 63% according to a study released by First Round Capital. And yet, only 2.7 percent of venture capital goes to women-owned businesses. This is the missed opportunity.

Through the Delta Entrepreneurship Network, DRA has created a platform for Delta entrepreneurs to access the resources and connections they need to participate in regional, national, and global markets. DRA just returned from New Orleans Entrepreneur Week, where a third of the participating DEN Fellows were women, and of the top three DEN Showcase winners, two were female-led companies.

Our female entrepreneurs and small business owners are continuing to see success and get the recognition they have earned. Emily Gaddis, founder of Gator + Crane won the Get Started pitch competition at NOEW. Sheena Allen, founder of Sheena Allen Apps, is featured in the documentary about showcasing the success of female tech entrepreneurs “She Started It.” Rachel Fuller, co-founder of Feather, has been awarded $250,000 worth of investment and relocated her business to Arkansas. Kayla Rodriguez, co-founder of SweetBio, just reached the $1 million mark in her and her partners’ fundraising efforts. 

Especially encouraging is the success and growth of women of color's entrepreneurial ventures. According to a recent report by the Institute for Women’s Policy Research, women of color are experiencing substantial growth in the areas of small business ownership and entrepreneurship. Nationally, the percentage of businesses owned by women of color grew 21% from 1997 to 2012. 

In fact, the study shows that women of color are much closer to achieving an equal balance of businesses owned by men and women within their own racial or ethnic group than white women. In 2012, black women owned nearly 60 percent of all black-owned businesses, compared with white women, who owned only 33 percent of all white-owned businesses. 

We want to see this trend continue. Especially important to DRA is to create and support an entrepreneurial ecosystem that is inclusive of women and entrepreneurs of color. Through a recent roundtable with twenty HBCUs in the region, DRA is learning how it can better support entrepreneurs from all backgrounds. Working closely with the Allen Entrepreneurial Institute in Atlanta, DRA is developing a soon-to-be-announced partnership to support the efforts of HBCUs to empower young entrepreneurs of color and help build a more inclusive entrepreneurial ecosystem in the Delta.

We all stand to benefit by investing in the women of our region. As we have just closed out Women’s History Month, it is important to note that every time a nation or society has empowered and invested in its female population, it sees success. Let’s make sure that the history we’re building for our mothers, sisters, wives, daughters, and friends is one where we have taken the opportunity to invest in their futures, their chances to succeed, and ultimately, the future of the Delta region.

Spencer Lucker