4 reasons women are a good bet for investors

4 reasons women are a good bet for investors


Estimated read time: 4-5 minutes

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SALT LAKE CITY — With a recent push toward supporting women-led ventures, it seems the best man for the job may sometimes be a woman.

However, statistics show that only 17 percent of this year’s tech startups were founded by women and only 25 percent of technology jobs are held by women. Today’s corporations remain slow to discover the positive impact and effective leadership style of a female business leader.

Those that do venture into underrepresented territories, though, have seen tremendous growth in their companies — and this success may result from four things women often bring to the workplace.

1. Women generate higher revenue.

A 2016 BNP Paribas Global Entrepreneur report found that companies run by women entrepreneurs had 13 percent higher revenues than those run by men and finished 9 percent above the average for all entrepreneurs surveyed.

Investment dollars, however, typically don’t head in the direction of entrepreneurial women.

An article in Fortune reported that venture capitalists invested $58.2 billion in companies with all-male founders in 2016. Meanwhile, women received just $1.46 billion in VC money last year.

“That massive disparity is due both to the differences in the number of deals and the average deal size by gender,” said Fortune reporter Valentina Zarya. “In 2016, 5,839 male-founded companies got venture capital funding compared to just 359 female-founded companies. In other words, companies run by men got more than 16 times more funding than companies run by women. But, in general, women business leaders generate higher revenues and bigger results."

2. Women excel at problem-solving.

Simplus co-founder and CEO Ryan Westwood recognizes a woman’s ability to identify solutions to mainstream problems.

“Women are natural problem-solvers,” says Westwood. “When women see a solution, they are fearless when they decide to move forward with it.”

Westwood’s angel investment company, JW Capital, has backed many companies founded by women.

Like Westwood, today’s venture capitals recognize that not only are women more likely to achieve a formal education, they also excel in social intelligence. In the technology industry where connecting with clients and forming lasting relationships is essential, women tend to be better listeners, more open to options, more flexible and more detail-oriented.

A recent study by the American Psychological Association found that women often outperform men on emotional intelligence and a comprehensive review of studies showed that female managers are more likely to elicit respect and pride from their followers, communicate their vision effectively, empower and mentor subordinates and approach problem-solving in a more flexible and creative way.

"There is now compelling scientific evidence for the notion that women are more likely to adopt more effective leadership strategies than do men," according to a Harvard Business Review.

3. Women are natural mentors.

With new business models relying on collaboration and employee engagement to ignite business growth and enhance workplace culture, studies show that women naturally possess skill sets that complement those models.

A 2012 Gallup poll that focuses on gender management styles found that “employees who work for a female manager are 1.17 times more likely than those with a male manager to strongly agree that, ‘In the last seven days, I have received recognition or praise for doing good work.’”

This study also found that, according to polled employees, female managers are 1.26 times more likely to encourage development and 1.29 times more likely to talk to employees about their progress.

Business Insider writer Jacquelyn Smith says a female manager’s success can be partially attributed to the adept and purposeful way women use their natural talents to engage a team because of the gender bias that still dominates leadership and management. Often women feel they need to exceed expectations to advance in an organization.

4. Women are focused and determined.

Audette Exel, an internationally renowned financial leader, says that working as an executive in an industry traditionally dominated by men has worked to her advantage.

“I know what it’s like to be underestimated. And I know what it feels like to stand up and succeed against the odds,” she said.

Her secret to success? Tenacity, resilience and a healthy dose of gratitude and humility.

“These are prerequisites for leaders who are trying to reshape perception and rethink accepted orthodoxy,” Exel told Inc.

It is those qualities that most impress Westwood when he meets aspiring female entrepreneurs.

“Women business owners have a comprehensive understanding of a problem, and they have a well thought-out solution that consistently carries mass appeal. Like most aspiring startups, they have a vision, but women carry a razor-sharp focus and a passion for their project, " Westwood said. "In many of these encounters, women entrepreneurs convey a determined attitude that is unshakable. That’s the kind of determination that launches successful companies.”

With proven expertise in problem-solving, engagement, focus and expanding the bottom line, women may be an investor's best bet.

Amy Osmond Cook, Ph.D., is a board member of the Association of Skilled Nursing Providers and Osmond Marketing. She is a regular contributor to Entrepreneur, Forbes, Huffington Post and other publications.

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