Women-led start-ups catch up in U.S. tech industry

Article By : Hailey Lynne McKeefry

Figures backing up women start-ups are impressive especially in the electronics and technology industry, and the acquisitions are way better.

In an industry that has a long history of being male-dominated, women are starting to ride the waves of technological and digital revolution.

In previous decades, the “woman-owned business” on a company was sometimes even a ploy to get preferential treatment in contract awards, rather than a real shift in leadership. However, signs are pointing to things changing.

“As investors in exclusively female-run businesses, we have noted that while many female-run companies focused on e-commerce, lifestyle and other consumer-facing sectors in previous years, we’re seeing more deep technology start-ups and enterprise-focused companies than ever before,” a recent Female Founders Fund blog said.

Women are founding more start-ups than ever before. At the same time, research has shown that companies with diverse leadership do better. “The companies in the top quartile of gender diversity were 15% more likely to have financial returns that were above their national industry median,” a McKinsey and Co. report titled Diversity Matters said. “Companies in the top quartile of racial/ethnic diversity were 35% more likely to have financial returns above their national industry median. “

At the same time, there’s plenty of room to improve. In New York City, 17% of Series A funding went to companies with female CEOs, a figure that outpaces other areas in the country, according to Female Founders. Women do seem to have an edge when it comes to getting funded using crowdfunding platforms, though. “Pitches created by women were more likely to express positive emotion, vividness and inclusiveness, and less likely to use business language,” said the Haas School of Business at the University of California Berkeley. “And that partially accounts for why women did better.”

The infographic below from Women who Tech outlines some other trends in connection to business start-ups by women.

 

Figure 1: Infographic of women start-ups: as technology and electronics industry evolves, women entrepreneurs catch up.
 

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