The National Women’s Business Council released a new infographic Tuesday illustrating the significant economic clout of women-led businesses.

While many use the term ‘women-owned’ to quantify women’s economic activities in accordance with federal procurement standards, NWBC believes women–led is a more accurate measure.  Through NWBC’s new research, we have identified that successful women-led businesses have a variety of trajectories and strategies for growth.  In many cases, successful women entrepreneurs running high-growth companies have chosen to give up equity in order to raise capital.  While women-led businesses are less than 51% owned by women, women still have a significant leadership position and ownership within the company, and this matters because many of these women-led businesses are driving economic growth and disrupting the industries they are entering.

Important highlights from the infographic include:

• Women have a greater economic impact than most think – 36% of employer firms are either women-owned or women-led.  17.5% of employer businesses are 51% owned by one or more women.  Yet, 18.8% of employer firms are at least 30% owned by women and have a woman in a leadership role.  When those two numbers are added together, women’s economic impact is much clearer.  That makes 36% of employer firms that are either women-owned or women-led.  When not focusing on women’s leadership role within a company, the numbers look even better.  42.4% of businesses are at least 30% owned by women.  These firms capture 26.1% or $2.6 trillion in receipts.
• Successful women-led businesses have a variety of trajectories and strategies for growth.  There is no one right way to grow.  NWBC’s new research shows that firms with more owners make more money based on median receipts.  Additionally, women and men-owned firms that have owners of the other gender perform better when looking at median receipts than firms owned just by men or women.  Despite this, women do not take on partners as much as men do; 89% of firms entirely owned by women have just one owner.

The infographic profiles NWBC Council Member Lisa Price, Founder and President of Carol’s Daughter, and her path to growth from her shop set up in her home to a global brand with $40 M in annual revenue.  Lisa’s growth trajectory demonstrates that there is no one right way to grow, and women should be empowered to seek partnerships when it makes sense for them and their business.

• A broader definition of women in business better captures their true economic impact.  There are a growing number of women who have founded and grown multi-million and even billion dollar businesses. More often than not, these women have partnered with investors and no longer own 51% of their company. The success and economic impact of these women is discounted when we focus on 51% ownership.

In NWBC’s new infographic, we have offered a model for conceiving of the continuum of growth as women transition from women-owned businesses to women-led business through growth and partnerships.  We have also highlighted a handful of the highly successful women running public companies, as well as a selection of female founders who now own and manage global brands.

• Women need to start thinking seriously about growth through partnerships.  There are a number of things to consider when exploring equity:
  • Consider the health of your business – Is this the right time?
  • Consider your industry – Are investors interested and active?
  • Consider your personal goals – Where do you see your business going?
  • Consider your brand and role – Are you, your vision, and your brand integral to the continued growth of the business?  If not, giving up equity may be risky.
  • Consider your network – Have you fully tapped your personal connections and resources?
  • Consider your pitch – Are you speaking to the investor?
• The private sector needs to focus on women-led businesses.  Procurement practices in the public sector often require that women have 51% ownership of a company to compete as a woman-owned business.  Initiatives in the private sector, such as increasing supply chain diversity, should not require women to have 51% ownership.  Enforcing this public sector requirement in the private sector may be limiting women’s access to equity capital and curtailing the growth of their businesses and participation in private sector opportunities.

The infographic is the second in a series that NWBC is producing utilizing its original research and new data sources from the Census Bureau.

NWBC launched the infographic during its public Council meeting in San Francisco, CA on August 14, and we were excited to see that our research was well received, indicating a strong desire to broaden the conversation around women’s role in the economy.  The meeting was open to the public and included guest speakers on women in technology and access to capital from key organizations, including Astia, Women 2.0, Kiva, Hummer Winblad Venture Partners, and BranchOut.   Sharon Vosmek, CEO of Astia, noted the term ‘women-led’ better captures the businesses Astia partners with in the high-growth, technology sector spaces, where relationships with investors are essential for growth.  Additionally, Ann Winblad commented that her firm had never funded an individual, because ‘individuals don’t scale,’ reinforcing the need to form teams and partner for growth.  The dynamic discussions were moderated by NWBC’s newly appointed Chair, Carla Harris, Vice Chairman of Wealth Management at Morgan Stanley, and newly appointed Council member Shelly Kapoor Collins, CEO of Enscient Corporation.