Only 1 Percent of Female Entrepreneurs Have Used Venture Capital to Fund Their Business

Female founders do many things to get their business running. They take loans, raid their life savings, hit up family and friends, and even rely on credit cards. According to a new study from the Women Presidents’ Organization (WPO) and Ernst & Young (EY), only one percent ends up using venture capital.
The study looks at how 430 businesses established by women were funded over their lifetime. It included a mix of established and young companies; about 51 percent of businesses surveyed were founded 21 or more years ago.
The 1 percent should not shock you. Women got just 2.19 percent of all venture capital funding in 2016. Historically, the number of women-owned business funded by venture capitalists has been even worse. From 1991 to 1996, of 362 businesses that received venture funding, only 31 deals were with women-led ventures.
If women are not using venture capital, where are the funds coming from? 68 percent of those surveyed by WPO and EY says they used personal savings to fund their businesses. At 27 percent, a line of credit was among the most common responses. About 22 percent incurred personal debt, and about 18 percent received a loan from a friend or family members.
More than 75 percent of the entrepreneurs surveyed reported that they generated between $1 M and $20M in annual revenues, with 14 percent reporting more than $20 million.


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