How Diverse is Entrepreneurship?
One of the core beliefs about entrepreneurship is that anyone with drive, tenacity, and a great idea can find success. It eliminates many of the barriers to entry into traditional career paths. It is, ideally, completely merit-based. And yet, women and people of color encounter greater hurdles than their white male counterparts. How diverse is the entrepreneurship community, really, and what can we do to change it?
The State of Diversity and Entrepreneurship
According to a recent piece by Forbes Coaches Council member Aaron Levy, “Women entrepreneurs say they must charge less than their male equivalents to get and keep clients.” Crunchbase revealed data showing that businesses led by women get 3% of all venture capital each year. For businesses led by women of color, that number shrinks to 1%. Not surprisingly, their report also showed that the percentage of venture-backed, women-founded companies had not grown for at least five years.
These numbers might deter women and minorities from even pursuing their startup dreams in the first place. However, a significant number of them are getting the education they need to succeed in business. Many of the top business schools have experienced increased percentages of women in their MBA programs in recent years. However, none of them yet has a 50-50 split, with women making up percentages somewhere in the 40s. A report from Kellogg Insight digs deeply into these numbers, if you care to explore further.
Still, not everyone needs an MBA to become an entrepreneur, and not all MBA grads start companies. So, where do we go from here?
The Future Faces of Entrepreneurship
Markets Insider reported, in 2017, that the rate of women-owned business was growing at 2.5x the national average. To put it another way, the number of women-owned businesses grew 114% over ten years. The number of companies owned by women of color grew four times faster than that. About a year later, Inc. magazine reported that collectively, people of color, women, immigrants, LGBTQ people, veterans, and physically disabled business owners were becoming entrepreneurs faster than white, cis, straight, abled men. And yet, they said, this “minority majority” continues to face stereotypes and other barriers.
The writer of the Inc. article concluded that the future will only get more diverse. Inclusivity is good business, she says. “Our country’s demographics are changing, and these companies seem to get where we are heading.”
Paths to Success for Women and POC
One area that research shows these groups struggle–besides funding–is a lack of mentors and role models. However, a mentor can play a key role in your success, so reach out and make those connections where you can. And, if you’re in a position to mentor someone else, take the opportunity. You will both likely benefit.
Look for business grants and other opportunities designed to increase diversity. Startup Nation has a list, but this is just a starting point. Make connections through ENT or social media and ask others what they know. A solid network can open all kinds of doors.