In a recent report from The Daily Finance, Dell had successfully launched its first female global entrepreneurship and development index, or GEDI, created to measure high-potential female entrepreneurship based on individual aspirations, business environments, and entrepreneurial ecosystems. According to the female GEDI, the U.S. was ranked the best country—number 1 out of 17 countries indexed—to be a female entrepreneur.
According to Professor Fiona Murray of MIT Sloan, however, women still have a long way to go. In an interview with Rob Matheson of MIT News, Murray expands on the specific inequalities in female entrepreneurship and what businesses and higher education can do now, to build a better future for female entrepreneurs.
Challenges Facing Women Entrepreneurs
According to Murray, female entrepreneurs have a few things working against them.
Many women-led, innovation-driven entrepreneurial businesses are not getting enough venture capital funding. “Less than 5% of venture capital (VC) dollars go to women-led companies,” says Murray. Part of the problem is that women tend to form startups alone and primarily in service businesses, which are two factors that probably mitigate VC funding.” To learn more about women and VC funding, read Murray’s recent post to the MIT Sloan Experts blog, “Playing by the rules–How female entrepreneurs can get in the venture-capital game.”
Another revealing factor is the lack of women on scientific boards—a strong sign of entrepreneurship (See our earlier post on gender gaps and SABs). Related to this, Murray’s studies of female faculty found that women commercialize their research into viable businesses at half the rate of male faculty. This may be due, in part, to the fact that women are less connected to industry and commercial networks. Among the women faculty and researchers Murray interviewed for her research, many were concerned about the potentially negative impact that patenting their research—a necessary step for commercialization—might have on education, collegiality, and research quality.
“Most importantly,” says Murray, “We need to understand how different decision-making processes favor or disadvantage women entrepreneurs and what we can do to change those perceptions.” This starts with studying what factors prevent investors from investing in these women-led ventures.
Solutions for Female Entrepreneurs
In addition to VC funds, there are many more options emerging for women entrepreneurs, such as Kickstarter, angel networks, and government grants.
MIT is committed to fostering an environment that supports women entrepreneurs. Most recently, MIT has brought in a strong circle of female mentors to accelerate women-led entrepreneurship. New to the MIT team are Katie Rae, managing director of TechStars; Jean Hammond, a Boston-based angel investor and serial entrepreneur; and Elaine Chen, an entrepreneur and vice president of product development at Rethink Robotics.
While MIT’s entrepreneurship development programs are designed to support both male and female students, Murray finds that “support from peers as well as more organized support and formal entrepreneurship activities, are important for everyone, but particularly so for women.”
Fiona Murray is an Associate Professor of Technological Innovation, Entrepreneurship, and Strategic Management at MIT Sloan and teaches in the Entrepreneurship Development Program and the MIT Regional Entrepreneurship Acceleration Program at MIT Sloan Executive Education.