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Nov 16, 2015 8:00 EST

Your Firm Is Missing Out On The Biggest Investment In History

iCrowdNewswire - Nov 16, 2015

Looking for an untapped market for a great new investment? Try 50.4 percent of the population. Today, women are the largest emerging investible class across the globe. Only 2.7 percent of venture capital-funded companies have a female CEO, and even in the 36.2 percent of non-farm businesses that are woman-owned, women only earned 11.3 percent of the revenue.

Women-owned businesses tend to perform better and typically reinvest more back into their communities. But these companies rarely see the investments they deserve, and if the venture capitalist community doesn’t pay attention, these companies will be forced to seek other forms of funding.

Changing The Language

Before crowdsourcing, if a business didn’t receive venture capitalist funding, no one would touch it — and because of the “old boys’ club” of investing, women have rarely gotten the investments they deserve.

But now, venture capital firms aren’t the be-all, end-all for raising capital. In the age of GoFundMe and Kickstarter, it’s possible that younger startups will begin to move away from the standard venture capital model and more toward alternative methods of fundraising. Many women-owned businesses or organizations have gotten public financing, whether through grant money or government funding.

If venture capitalists want to stay competitive, they need to pay attention to women-owned businesses. But what’s kept them from paying attention in the first place?

Sticking To The Old Boys’ Club

Lack of access and lack of awareness have been the main factors preventing women from getting the investment opportunities they deserve. Many women don’t have access to these male-dominated organizations, and that’s where some of the distribution and disruption of capital formation marketing comes in.

Venture capitalists aren’t seeking women-owned companies, so there is an absence of capital flowing toward this talent, which perpetuates the gap in access for and awareness of women-owned businesses. When investors seek to finance these companies, that gap will begin to close, and both the investor and the entrepreneur will see results.

If venture capitalists want to stay competitive, they need to pay attention to women-owned businesses.

Whether people are aware of it or not, women-owned businesses are excelling. Data collected in 2013 shows that more than 8.6 million businesses in the United States are owned by women, and these businesses are generating more than $1.3 trillion in revenue and employing almost 7.8 million people. The number of women-owned firms is increasing faster than the number of men-owned businesses across the board. Does that sound like a sector worth investing in?

Elevating Women In Business

Ideally, we wouldn’t have to talk about this issue because all businesses would have equal opportunities to succeed. But the current state of venture capital firm investment in women is deplorable, and there’s a pressing need for differentiation between women-owned companies and men-owned companies because of this clear gap in revenue and funding.

There are great initiatives in the marketplace that elevate women in business — High Water Women, It’s Time Network, and Springboard Enterprises are examples — but the business world could benefit from continued visibility, awareness and mentoring for women-owned companies. And while these businesses certainly provide education to women-owned businesses, women still need access to capital to back up their knowledge and expand their businesses.

 

If you look across the world at the female population, it’s easy to see that they represent the largest investment opportunity there is.

Venture capital firms can also improve the way they look at investing in women-run startups and be more intentional about bringing women into their firms. It all comes down to outreach and engagement. Venture capital firms need to collaborate with women’s organizations and groups in order to understand the opportunities available to them as far as capital investments are concerned. Look at places like IMPACT Leadership 21, which has created entire public forums to foster conversations between women and men in the business world.

Considering the crowdsourcing community, venture capital firms should embrace companies who have had those types of opportunities in order to seek more women-owned businesses. These firms could invest in what was initially an alternatively funded company that has gone through a cycle of development and is now at a stage where it could benefit from venture capital funding.

If you look across the world at the female population, it’s easy to see that they represent the largest investment opportunity there is.

Let’s level the playing field and eliminate access barriers to established firms and funds so that both venture capital firms and women-owned businesses (soon to be known as “businesses”) will be able to mutually flourish.

 

Vincent Molinari is the co-founder and CEO of electronic marketplace platform GATE Global Impact and a managing partner at Constellation Fin Tech. He consults with members of Congress and regulatory agencies on issues related to capital markets, early-stage companies, and secondary market liquidity.

 

Vincent Molinari
CEO / Founder
GATE GLOBAL IMPACT INC
www.gateimpact.com
917-886-7250
@vincemolinari
Skype: vince.molinari

Contact Information:

Vincent Molinari

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