NEW YORK — It was a scene straight out of the 1990s: A web start-up, flush with nearly $1 million in new investor cash, threw a party at a downtown bar to toast that success. But here’s the 2011 twist to the story of DailyWorth, a daily e-mail newsletter of financial tips: the founder, Amanda Steinberg, isn’t a 24-year-old male Stanford dropout. She’s a thirtysomething mom of two who is determined to change the image of what a serious entrepreneur looks like.
Venture Capitalists, It’s Time to Invest in Women
“I started this thing with the vision of having millions of subscribers from day one,” she says. She spent 10 years in the tech world and saw many “half-baked business models.” She knew she could “do a much better job.”
That might be true — but Steinberg is one of the rare women who has convinced the so-called angelsand venture capital investors who fund start-ups of that fact. Women own 29% of all businesses, according to a recent American Express study. Yet various expert calculations find they receive well under 10% of all equity financing. Many female entrepreneurs either use their own funds or take out bank loans to grow. These methods have their merits, but also their limits. According to AmEx, women-owned businesses employ just 6% of the country’s workforce and contribute less than 4% of overall business revenue.
Though the world of equity financing — and the fast growth it enables — might be one of the last old boys’ clubs, there’s a movement is afoot to infiltrate it. That’s good news: Angel and venture capital cash aren’t for all businesses, but if an equitable percentage of women scored it, that could help put a dent in the 8.8% unemployment rate.