Just last month, venture firm First Round Capital (their portfolio includes Blue Apron and Warby Parker, Square and Uber) completed a study after they analyzed 300 companies and nearly 600 founders, representing 10 years’ worth of investment data. It turns out that “female founders outperform their male peers.” Specifically, companies with a female founder performed 63% better than other investments with all-male founding teams.[Tweet this]
These findings support a 2012 Dow Jones “Women at the Wheel” report that reviewed more than 15 years of venture-backed company data and executive information in the VentureSource database. They found that venture-backed companies that include females as senior executives are more likely to succeed than companies with only men in charge.
In 2011, Harvard Business Review published an articlebased on a research study performed by Jack Zenger and Joseph Folkman. A survey of 7,280 domestic and international leaders from both public and private sectors rated women higher in 12 of the 16 competencies that define outstanding leadership. The study found that “at every level, more women were rated by their peers, their bosses, their direct reports, and their other associates as better overall leaders than their male counterparts — and the higher the level, the wider that gap grows.”
With studies supporting the notion that women contribute to a company’s success, it’s no wonder that there has been recent press showcasing successful female entrepreneurs.
So, why are women well equipped for startup environments?
As Jack Zenger and Joseph Folkman concluded, most stereotypes aligned with female leaders such as “developing others and building relationships, exhibiting integrity and engaging in self-development” concurred with data. In addition, women outscored men when it came to taking initiative and driving for results.
In 10 Steps to Becoming a Successful Entrepreneur, the need to “constantly take action” is highlighted as an important ingredient to success, so a woman’s proclivity to take initiative serves an organization well.
Additional research shows that “organizations that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers.” Compelling financial data that further supports the need for women in leadership positions.
Being visible is one of the habits listed in 7 Habits of Highly-Effective Entrepreneurs. According to Forbes, “women are shedding their cloak of invisibility." Women are proactively seeking visibility and recognize the importance of public speaking and awards to “build the credibility and reputation of their companies.”
On top of that, women have become power-users of technologies, such as the internet, mobile, and social media. According to eMarketer, “women are increasing the amount of time they spend on social networking sites.” And, social networks are being leveraged to build and expand networks. In fact, a new class of networkers is emerging and they are called “super connectors.”
With all this research and data to support the value of women in top management roles, are women occupying an increasingly prominent position in startups?
According to CrunchBase, startups with a female founder doubled in five years from 9.5% to 18%.[Tweet this] They add that “at the same time, the absolute number of companies (along with the total number of startups) with a female founder more than quadrupled from 117 in 2009 to 555 in 2014.”
While strides have been made, there is a ways to go before we see a balanced ratio between male and female entrepreneurs.
If you’re lacking female executives in your organization, you may be missing a key ingredient. After all, more and more businesswomen embody qualities that sync up with 10 Behaviors of Real Leaders. At Matrix Marketing Group, we pride ourselves on our diverse executive team of men and women. So, if you need an infusion of female talent, take our marketing assessment to see if there is a strategic fit between our two organizations.