On Sunday, the world will celebrate International Women’s Day for the 45th time as a global community since the U.N. first declared the global observance in 1975. In 1977, the event was crystallized into an annual occurrence by decree – though technically, women’s rights has since split the bill with world peace on March 8.
In advance of the holiday, Visa has released findings from its second annual State of Female Entrepreneurship report, which paints an interesting (if mixed) picture of its eponymous topic. On the one hand, it’s tough out there for female entrepreneurs, two-thirds of whom find funding to be a major hurdle – an unsurprising outcome, given that less than 5 percent of venture funding goes to firms with female CEOs.
And while the full explanation for that is not simple, Visa’s Global Head of Merchant Sales and Acquiring Suzan Kereere told Karen Webster in a recent conversation, there is a simple reality that female entrepreneurs often deal with a bias that works against them when they walk in to pitch – and even long before then.
“There is a lack of a level playing field, whether it’s the training and education, the access to mentorship, the access to capital right at the start to build scale, and then – as an outcome – less capital when they are heading into their hardest challenges,” she said. “And over that, perhaps some level of bias in how their proposals are received by those who may be in positions to offer them funding.”
And when two-thirds of female entrepreneurs feel that pinch, she noted, it strongly indicates a problem in need of a solution. But Visa’s study also demonstrates that for all the headwinds, 79 percent of female entrepreneurs in the U.S. report feeling more empowered today than they did five years ago. So what is inspiring the cohort, when the funding situation is making slow progress at best?
Simply stated, there are 250 million female-owned businesses worldwide today, and the rate of women founding businesses is outstripping men. Women are seeing other females plowing through the headwinds and starting ventures, inspiring them to do the same.
“They are getting funding through credit cards, family and friends, community, other networks – whatever it takes,” noted Kereere. “I think women are prepared to extend themselves to get there and bootstrap their way through if they have to.”
But the goal, she said, is to make the hill a lot less steep to climb – which is why alongside its new data, Visa is also announcing partnerships with Hand In Hand International and IFundWomen to build opportunities for female entrepreneurs in developed and developing economies.
Creating Empowerment Networks
When Visa spoke to female founders for their research, after the funding gap, the other two most common areas of concern were access to digital tools and strategies and guidance on the management and leadership of a business. Visa’s newly announced partnership with IFundWomen allows them to focus on all three of those areas at once – starting in the U.S., with an eye toward international expansion.
Working as a dual funding and education platform, IFundWomen is designed to allow female founders to access capital through grants and crowdfunding, as well as expert business coaching and an advisory network of female founders. The average U.S. business needs about $10,000 to get off the ground, Kereere said, and Visa’s new partnership with IFundWomen will allow them to push those funds forward via a series of grant contests. This allows Visa to address the funding gap by getting capital directly into founders’ hands.
But just as important, noted Kereere, the two are aligned on the idea that filling in the gaps for female entrepreneurs has to go further than funding alone – it’s also about building peer networks that can support mutual advancement.
“They talk a lot about the value of these peer-to-peer networks and the role of coaching and enabling others,” she said. “If you look at the relationship we have with Rebecca Minkoff and the Female Founder Collective, one of the reasons it exists is because the thing those founders all missed most when they started their own businesses was a network of like-minded people. So they created it. And that social content and capital go much farther than just funding alone.”
And while the $2.4 million partnership they have announced with Hand in Hand International is quite different, Kereere noted, it is also intimately tied to the idea of powerful women in interconnected economies.
Ahead of #InternationalWomensDay, @Visa is proud to partner with @handinhandint to increase access to business skills & financial services for 10,000 micro businesses in Kenya – 75% of which are women-owned! Learn more: https://t.co/byi9B6HjGz #IWD2020 #EachforEqual pic.twitter.com/1BnioXiyRk
— VisaNews (@VisaNews) March 3, 2020
Developing the Developing World Opportunity
Visa’s partnership with Hand in Hand International will focus on providing business education and broadened financial services access to 10,000 micro-businesses in Kenya, at least three-quarters of which will be owned by women. And Kenya is just a starting place – Hand in Hand International focuses on developing economies in Africa, South Asia and the Middle East, so the potential for expansion is broad.
And while the services Visa plans to push forward in Kenya will be an incredible boost to women entrepreneurs, Kereere noted, they will also aid their communities as a whole. The data shows that female entrepreneurship in developing nations has a powerful multiplier effect – for every dollar that goes in, nearly 90 percent reverberates throughout the community, thereby building the local economy, she pointed out.
“In the African context, so much of spending is associated with women – spending for the family, savings, education. Those dollars pass through female businesses into those areas,” Kereere said. “So the community benefit of funding a woman goes much further.”
Looking at Kenya and similar developing economies, she said, it’s evident how driven they are by small businesses and individual proprietors. These community effects aren’t small – these startups are becoming major influencers of the GDP as a whole.
The reality of women driving economies all over the world is not only becoming possible – it’s increasingly likely that the barriers that have traditionally kept them out are sliding down, albeit more slowly than anyone would like. But Visa, said Kereere, is committed to using the power of its network to speed up the process.