Tracy Killoren Chadwell, Founder and Partner of 1843 Capital, WIPP Friend

Water makes things grow. Capital makes companies grow. Companies grow jobs.

If job growth is a priority for the U.S. government, then investing in women led startups should be a priority. Women led startups are one of the highest growing categories for job growth. Women start 1,000 businesses every day. Women have added 1,290,245 jobs over the last 10 years. They contribute $1.4 Trillion dollars in receipts annually to the U.S. economy. According to BusinessDynamics Statistics (U.S. Census) existing companies are net job killers (1 million per year) and startups are net job growers (more than 3 million per year). Women are the gardeners and women are starting companies at 1.5 times the average rate.

Women founded companies are seeing a tremendous amount of support at the seed stage. Women focused incubators, accelerators, grant programs, mentors, seed investors and grant programs are in place. They are doing a great job of getting the seeds planted and the companies’ roots to take hold. However, there is a big component missing. The capital is lacking to take the companies from seed stage to a place where they can achieve profitability. Companies reach a place where they are finding traction, gaining customers and hiring people and they are left to wither for lack of funding. Venture capital, the traditional source of capital to grow, goes disproportionately to companies that have all male teams. According to the Diana report, women led companies only receive 3% of total venture capital dollars. 97% goes to male teams. Researchers at the MIT Sloan School, Harvard Business School, and Wharton Business School found that, given the same pitch, men were 40 percent more likely to receive funding than a woman presenting the same pitch. Some may argue that the companies led by men are somehow “better.” We finally have great data that says that isn’t true. A study by First Round Capital, of 300 of it’s portfolio companies, shows that a company with at least one female founder on the team outperformed the traditional all male companies by 63%. A study by Stamford University shows that female led venture backed companies out perform by 35% and have 12% more revenues.

The story on the debt side isn’t any better. Women led businesses received 4% of commercial loans. Loan approval rates for women owed companies are 15-20% lower than for companies with traditional all male teams. When they do get access to loans, they are often subject to higher interest rates.

Amazingly enough, high growth women led companies are not all technology based (although a wise woman once said “all businesses are technology businesses”). They are health care, service, manufacturing and consumer products, every garden variety.

The solutions to this problem are readily accessible. We can empower more female fund managers with capital. We can expand business education and counseling for women. We can change the way credit is created and monitored. We can support and expand small business lending. Women traditionally have achieved so much more with less. On average, women grow their businesses with less than half the capital than men. A little water will yield a bumper crop of new jobs.

Uncle Sam, Mrs. American Startup is here to rescue you. All we need is a little water for the desert.

Tracy Killoren Chadwell is the Founder and Partner of 1843 Capital, an early stage venture capital fund focused on women led companies. 1843 was the year Ada Lovelace (the only legitimate daughter of Lord Byron) wrote the first computer program. http://www.1843capital.com

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