User:Julcohn/sandbox

Present challenges
Even though female entrepreneurship and the formation of female-owned business networks is steadily rising, there are a number of challenges and obstacles that female entrepreneurs face. One major challenge for female entrepreneurs face traditional gender-roles that are structurally internalized by society. Entrepreneurship is still considered as a male-dominated field, and it may be difficult to surpass these conventional views. Other than dealing with the dominant stereotype, female entrepreneurs are facing several obstacles related to their businesses.

Obstacles specific to starting new firms
The theory of "homophily," is a concept described by social scientists as the tendency for people to seek out or be attracted to those who are similar to themselves. This theory impacts the number of women who are able to start new firms, because there are less women than men who own their own companies; women compose about half of the labor force, but own only 36 percent of US companies. This statistic shows how it is evident that the number of women in this field is disproportionate to the population. Recent data suggests that when female entrepreneurs start their businesses, they have significantly lower levels of capital than men. A disproportionate access to capital, compared to male entrepreneurs, also serves a systemic barrier to creating a new firm. Women who start their own firms have a higher likelihood of success if they have disposable financial or social capital. Without this opportunity, there are many more obstacles that place women at a disadvantage compared to their male counterparts. Women entrepreneurs are starting as a disadvantage when starting their firms, making it more difficult to navigate the initial stages of growing a personal business. Other obstacles include the fact that firms owned by women tend to be smaller than men, are more likely to fail, and have lower levels of sale, profits and employment. Knowing that these barriers exist may serve as a deterrent to female entrepreneurs, or alternatively increase the chance of less successful firms. Structural elements include sex discrimination and internalized stereotypes create these barriers. Furthermore, firms owned by women are predominately part of the service and retail sector. Consolidation of female-run firms in a specific sector highlights internalized stereotypes regarding abilities and interests of female entrepreneurs.

External finance and sex discrimination.
In general, women have lower personal financial assets than men. This means that for a given opportunity and equally capable individual, women must secure additional resources compared to men in order to exploit the opportunity; because, they control less capital. The question of whether women have a harder time getting finance than men for the same business opportunity has developed into its own sub-field.[27][28][29] One possible issue in raising outside capital is that 96% of senior venture capitalists are men and may not be as understanding of female-centric businesses.[30] However, the situation seems to be improving. A study by Babson College showed that in 1999, fewer than 5% of venture capital investments went to companies with a woman on the executive team. In 2011, it was 9% and in 2013 it had jumped to 18%.[31]

A specific solution for solving women's difficulties for obtaining financing has been micro-financing. Microfinance is a financial institution that has become exceptionally popular, especially in developing economies. Female entrepreneurs have also been especially successful in getting funded through crowdfunding platforms like Kickstarter.[31]

Due to lack of funding for women in new businesses many women founders have had to hire or create fake male profiles to act as co-founders, executives, or the face of their businesses to make progress. [32]

Obstacles to managing a small firm
Studies on female entrepreneurs show that women have to cope with stereotypical attitudes towards them on a daily basis. Business relations—from customers to suppliers and banks—constantly remind the entrepreneur that she is different, sometimes in a positive way such as by praising her for being a successful entrepreneur even though she is a woman. Employees tend to mix the perceptions of the manager with their images of female role models, leading to mixed expectations on a female manager to be a manager as well as a "mother". The workload associated with being a small business manager is also not easily combined with taking care of children and a family. However, even if the revenues are somewhat smaller, female entrepreneurs feel more in control and happier with their situation than if they worked as an employee.[33] Female entrepreneurship has been recognized as an important source of economic growth. Female entrepreneurs create new jobs for themselves and others and also provide society with different solutions to management, organisation, and business problems. However, they still represent a minority of all entrepreneurs. Female entrepreneurs often face gender-based barriers to starting and growing their businesses, like discriminatory property; matrimonial and inheritance laws, and/or cultural practices; lack of access to formal finance mechanisms; limited mobility and access to information and networks, etc.

A woman's entrepreneurship can make a particularly strong contribution to the economic well-being of the family and communities, poverty reduction and women's empowerment, thus contributing to the Millennium Development Goals (MDGs). Thus, governments across the world, as well as various developmental organizations, are actively undertaking the promotion of female entrepreneurs through various schemes, incentives and promotional measures. Female entrepreneurs in the four southern states and Maharashtra account for over 50% of all women-led small-scale industrial units in India[citation needed].

Obstacles to growing firms
A specific problem of female entrepreneurs seems to be their inability to achieve growth, especially sales growth.[34] Another issue is finance and, as stated previously, the entrepreneurial process is somewhat dependent on initial conditions. In other words, as women often have a difficult time assembling external resources, they start as less ambitious firms that can be financed to a greater degree by their own available resources. This also has consequences for the future growth of the firm. Basically, firms with more resources at start-up have a higher probability to grow than firms with fewer resources. Resources include the following: societal position, human resources, and financial resources. This initial endowment in the firm is of great importance for firm survival and especially for firm growth.[35][36][37][38]

A study by the Kauffman Foundation of 570 high-tech firms started in 2004 showed that women-owned firms were more likely to be organized as sole proprietorships, both during their startup year and in the years to follow. Female entrepreneurs were also much more likely to start their firms out of their homes and were less likely to have employees. This fact may serve as an indication that women either anticipated having smaller firms or were operating under resource constraints that did not allow them to launch firms requiring more assets, employees, or financial resources. This study also found that women only raised 70% of the amount that men raised to start their firms, which ultimately impacted their ability to introduce new products and services or expand their business in terms of employees or geographic locations.[30]

Despite the fact that many female entrepreneurs face growth barriers, they are still able to achieve substantial firm growth. There are examples of these both in a number of developing economies (Ethiopia, Tanzania, and Zambia) surveyed by the ILO, as well as in more developed economies such as the United States.