Posts Tagged ‘Capital’


Deirdre Collins of Dee's Whole Foods in Ballincollig

Thwarted by the lack of promotional opportunities available in traditional corporate entities many venturesome Irish women have turned entrepreneur instead. For talented women denied the flexibility required to combine family life and a decent career by the linear nature of hierarchical progression, the establishment of a businesses offers the possibility of successfully doing both. Deirdre Collins, a food science graduate from Cork, recently developed her own range of whole food burgers and has now hooked up with Dragon’s Den entrepreneur Niall Farrell. Redundancy prompted Una Griffiths to establish a business selling beautiful silver jewellery from her living room. They are just two of many. 

Women in the US launch new enterprises at twice the rate of men and employment and revenue growth in these has outpaced the rest of the economy. Yet success certainly doesn’t come easy. The US-based “Center for Women’s Business Research” has discovered that for women persistance is a key factor when trying to secure start-up or expansion capital. Successful applicants made an average of four attempts to obtain bank loans or lines of credit and 22 attempts to obtain equity capital. Many female-owned start-ups are forced to remain small due to this difficulty in accessing credit or capital. Again US research suggests that female owners of rapidly expanding firms are far more likely to rely on business earnings as their primary funding source than their male counterparts (72% vs. 56%). 

Despite the downturn, some new start-ups like those highlighted above are doing very well. The problems tend to arise when expansion is mooted and these enterprising women go in search of new capital to facilitate this. On average, female-owned business are still small compared with businesses owned by men. In the US the average revenue of majority female-owned businesses is approximately one-quarter the magnitude of the average revenue for majority male-owned businesses. Women tend to come to entrepreneurship with fewer resources available to them and are therefore more likely to operate in sectors such as retail or personal services where the cost of entry is low. The difficulty is that so is the growth potential. Research shows that women, despite our reputation as serial credit card abusers, are more debt averse than men when it comes to their business dealings. Yet banks have consistently demonstrated a tendency to treat their proposals with skepticism. 

In the light of our recent experience of a systematic failure of the established banking sector in Ireland perhaps there is now an opportunity for entrepreneurial women to argue that they represent a safer risk than alpha male property moguls. Securing capital from financial institutions is particularly difficult at the moment yet it would seem unjust if women entrepreneurs were still faring worse than the bullish men who got us into this mire? There is some suggestion that capital will free up somewhat in the coming months. We can only hope that a more rigorous assessment of risk sees more of it channelled towards the many entrepreneurial woman keen to create employment and rebuild our economy.

Read Full Post »