Home > Uncategorized > Why Women Investing in Female Entrepreneurs Adds Up

Why have female investors fund female entrepreneurs? Because when it comes to women’s role in investment, the numbers say it all.

With roughly 67.5 million women in the U.S. workforce, there are only 8.3 million women-led businesses. According to an American Express-comissioned report on the State of Women-Owned Businesses, those 8.3 million businesses generate $1.3 trillion in revenue and employ nearly 7.7 million people. Despite the massive profitably and influence existing female-led businesses have, woman-led startups still lag in the fundraising stage.

The Center for Venture research found that of all businesses in the country seeking venture capital, only 16% were female-owned and just 24% had received angel investments. To put it another way, women have a presence in management at fewer than 5% of new businesses funded by venture capital, according to Candida Brush at Babson College. That’s despite the fact that research by Dow Jones and Businessweek shared by Upstart Accelerator showed that “women-led private technology companies generate 35% higher returns on investment, and when backed by venture capital earn 12% higher revenues than those led by men. Yet women launch only 3% of high growth tech startups.”

The numbers show an obvious pain point in need of a solution. How can the vast number of female entrepreneurs and business leaders access the same level of funding as their male counterparts? How can female-led businesses grow in both number and in the size of their investments? How can women in business use their money and influence to help bring their sisters to the table? The Jump Fund provides a way for women to help other women to thrive.

The best way to change these numbers is directly, by investing more money in more female-lead companies. Our goal is not only to focus on women investing in women, but to encourage this in the Southeast, where the numbers are even more off balance than in other parts of the country. We want to make a difference both in the lives of women, and in our regional community. We’d like to see the statistics on women in startups add up to more business savvy ladies doing what they love and making bank in the process. That’s the Jump Fund way.