Myra M. Hart

Women entrepreneurs who break through to equity financing: The influence of human, social and financial capital

This is one of the first efforts to systematically study attributes of women business owners and their equity financing strategies. The study explored the factors associated with the use of equity capital in women led firms. Hypotheses examined the influence of human and social capital on the likelihood of seeking equity funding, access to funding sources, bootstrapping techniques and development of financial strategies. Data for this study came from a survey of 235 US women business owners conducted by the National Foundation for Women Business Owners from a sample identified by Dun and Bradstreet. Results showed only graduate education significantly influenced the odds of using outside equity financing. Social capital had no direct effect on increasing likelihood of using equity but influenced the use of bootstrapping techniques. Network diversity was positively related to the use of personal sources of funding, while professional advisor relationships were negatively related to personal sources of financing. Our research suggests women obtaining higher levels of education may increase their likelihood of obtaining funding. Further, during the bootstrap phase, utilizing social capital is an asset.

Patterns of venture capital funding: Is gender a factor?

Since the early 1980s, new ventures with high growth potential and large capital needs have found an ever-increasing pool of venture capital available to support their growth. However, the flow of venture capital investment to women-led businesses remains meager in spite of the fact that in the US and Europe an increasing number of businesses are owned by women. The apparent disparity between potential investment opportunity and actual deals made between venture capital firms and women-led businesses raises the question of whether gender is an issue. The majority of venture capital studies investigate equity funds flows, investor criteria and the nature of the investor-investee relationship. Research on women entrepreneurs focuses on psychological dimensions, business characteristics and performance. Questions about the intersection of gender and venture capital financing are largely unexamined. This exploratory study utilizes longitudinal data to track US venture capital investments by proportion, stage, industry and gender. The descriptive statistics and our analysis of the findings suggest several hypotheses to explain the apparent gender gap.

The role of social capital and gender in linking financial suppliers and entrepreneurial firms: A framework for future research

Equity capital fuels growth companies and yields high returns for investors. The process of equity investment and ultimate harvesting of innovative companies has created significant wealth among fund investors, venture capitalists, angels and new entrepreneurs. Extensive research investigates all phases of the venture capital investment process, industry characteristics and returns to investors. Surprisingly absent from current research are studies including women, on both the supply (equity provider) and demand (equity seeker) sides. Women make significant contributions to the US economy in the workforce and as business owners, yet research about women as recipients of equity capital and providers of equity is extremely scarce. This raises a question--are women being left out of the wealth creation process? Our paper addresses this question by exploring womens role in supply and demand of equity capital. We utilize a social capital perspective to develop a conceptual framework and focus our analysis on early stage and angel investment. The paper concludes with directions for future research.

The use of bootstrapping by women entrepreneurs in positioning for growth

Abstract The number of women entrepreneurs is rising rapidly and many are creating substantial businesses. For most women-led ventures, growth is funded by personal investment and debt, although a small percentage draw on private equity investment to fuel high growth. Of those that seek growth, not only do they face higher obstacles in obtaining capital, but little is known about ways they position ventures for growth. This paper addresses the question: ‘How do women develop financing strategies to prove the business concept, meet early stage milestones, and demonstrate to external investors the value and potential of their businesses?’ Data are drawn from phone interviews with 88 US female entrepreneurs seeking an equity investment to grow their businesses. The analysis examines the correspondence between bootstrapping and stage of business development. Results show significant differences in the use of bootstrap options utilized by women-led ventures depending on stage of business development. Companies that have not achieved sales were more likely to emphasize bootstrapping to reduce labour, while those companies with greater sales were more likely to minimize cost of operations. Implications for future research and education are suggested.

Empreendedorismo e construção da base de recursos

Strategies for attaining competitive advantages emphasize developing and configuring existing resource strengths into a valuable and unique resource base. But what if you do not yet have a legacy of resource strengths? Entrepreneurs in emerging organizations must first assemble resources, then combine them to build a resource platform that will yield distinctive capabilities. The case studies included in this article illustrate the challenges entrepreneurs confront in identifying, attracting, combining, and transforming personal resources into organizational resources. We offer two analytical tools for assessing initial resource needs and developing a resource strategy that can enhance possibilities for wealth creation. Our pathway approach provides guidance for entrepreneurs constructing a resource base.

Introduction: The Diana Project International

Small firms drive economic growth. Research in the OECD countries consistently shows that job growth in the entrepreneurial sector is substantially higher than it is among established (corporate) incumbents (Audretsch and Thurik, 2001). More recently, the international buzz about entrepreneurship has become even more pronounced with the explosion of new technology, rise in the availability and use of equity capital and breaking down of economic and trade barriers. The Global Entrepreneurship Monitor (GEM) studies find that entrepreneurship is a central source for employment creation (Reynolds et al., 2001; Acs et al., 2005). Collectively these studies reveal that location matters. The ways that people start and grow businesses vary substantially by country, depending on level of economic development, cultural factors, natural resources and industrial base. In developed countries, entrepreneurial ventures produce innovations and create wealth, as well as enhance economic development in challenging geographic or industrial sectors (Acs et al., 2005). In transitional economies entrepreneurship drives privatization by building market institutions, influencing monetary and fiscal policy, and affecting macroeconomic stabilization and growth. Economic development supporting new venture creation is an

From initial idea to unique advantage: the entrepreneurial challenge of constructing a resource base

Executive Overview Strategies for attaining competitive advantages emphasize developing and configuring existing resource strengths into a valuable and unique resource base. But what if you do not yet have a legacy of resource strengths? Entrepreneurs in emerging organizations must first assemble resources, then combine them to build a resource platform that will yield distinctive capabilities. The case studies included in this article illustrate the challenges entrepreneurs confront in identifying, attracting, combining, and transforming personal resources into organizational resources. We offer two analytical tools for assessing initial resource needs and developing a resource strategy that can enhance possibilities for wealth creation. Our pathway approach provides guidance for entrepreneurs constructing a resource base.