Small business ownership and entrepreneurship are a powerful tool to fight poverty and build wealth for women, immigrants, and people of color. For instance, the median net worth of a black female business owner, is ten times that of a non-business owner and woman microbusiness owners earn an average of $13,000 more than households with only wage earners. However, female-headed business owners face significant barriers to success, including lack of access to capital and equity. On average, women start their business with half as much capital as men ($75,000 vs. $135,000). Further, a gender gap exists in equity financing. Women receive .1%of venture capital financing compared to .4% of men. Meanwhile, a serious gender disparity in patenting rates makes it more difficult for women to attract venture capital. While over three-quarters of venture capitalists report using patents to make funding determinations, women hold less than 20 percent of all patents in the United States, and make up only 7.7 percent of primary inventors on U.S. patents.
– Ensure that small business owners, especially women and people of color, have access to capital.
– Incentivize alternative sources of capital, while ensuring protections are in place to prevent predatory lending.
– Build public-private partnerships to invest in innovative women and minority-owned businesses.
– Spearhead initiatives to develop startup incubators and accelerators to support women and minority-owned businesses.