We see the landscape of women’s entrepreneurship in the US is evolving rapidly.
As we navigate through 2024, it’s clear to us that women are making significant strides in the business world. But there’s still work to be done. The business growth of women-owned businesses in various industries is noteworthy, reflecting an upward trend in the establishment of new women-owned businesses in specific cities and the need for greater financial assistance to navigate economic uncertainties and promote further growth. In this article, we’ll dive into the latest statistics, emphasizing how women’s educational achievements contribute significantly to their roles in business leadership. We want to do more than just exploring into the data of how many female entrepreneurs there are in the US, or how much money raised by female founders.
We’ll also explore the challenges and opportunities faced by women entrepreneurs, and discuss what the future might hold. Strategic hiring practices and enhanced workplace policies are key factors in the business success of women-owned enterprises, enabling them to attract and retain talented, resilient teams that drive their businesses forward.
Key Takeaways: 2024 US Female Entrepreneur Stats
- Female entrepreneurs own an impressive 39.1% of all US businesses (wippeducationinstitute.org)
- Women-led firms, particularly in small businesses, experienced a 13.6% growth between 2019 and 2023, outpacing male-owned businesses and highlighting the significant contribution of small businesses to this growth (National Women’s Business Council).
- Less than 25% of all deals went to female-founded companies in 2023. (TechCrunch)
- Female-founded companies in the U.S. raised $44.4 billion out of the $170.59 billion in venture capital allocated in 2023 (TechCrunch)
- The proportion of startups founded by women reached 49% in 2023. A significant increase from 29% in 2019 (Gusto Survey of Business)
- A 28% increase in women-owned businesses among entrepreneurs of color compared to previous years. (Guidant Financial’s 2023)
How Many Women-Owned Businesses In The US?
Despite the increasing number of women-owned businesses, there remains a noticeable disparity in revenue and capital compared to their male counterparts. Women-owned businesses account for only 9.2% of the workforce and 5.8% of total firm revenue nationally.
Nonetheless, women-led firms have demonstrated remarkable resilience and growth. Between 2019 and 2023, the number of women-owned businesses increased by 13.6%, compared to 7.0% for men-owned businesses.
This trend suggests that women are not only starting businesses at a higher rate but also successfully navigating the challenges associated with entrepreneurship.
How Much Money Raised By Female Founded Companies In 2024?
One of the most significant obstacles faced by women entrepreneurs is the persistent funding gap. In 2023, female-founded companies in the U.S. raised $44.4 billion out of the $170.59 billion in venture capital allocated. Among all-women founded companies, they raised just $3.1 billion, or 1.8% (TechCrunch).
This is a decrease from the 2.1% they secured in both 2022 and 2021. In fact, this is the lowest percentage of venture capital allocated to all-women teams since 2016. When female founders received 1.6% of all venture funds.
However, there is positive news for mixed-gender founding teams, which raised 26.1% of all venture capital allocated in 2023, a significant increase from the 18.2% they secured in 2022. This suggests that women founders still have better outcomes when a male co-founder is involved.
Despite the overall decline in VC deals due to market difficulties, less than 25% of all deals in 2023 went to female-founded companies. The most popular categories for investment were software, B2B, SaaS, pharmacy, and bio. Also, New York City leading as the top location for women to receive deals, followed by San Francisco and Los Angeles.
Women founders continue to face challenges in securing funding.
Some investors suggesting that having a male co-founder might make their companies more fundable. However, many remain optimistic and believe that women are adapting to navigate the male-dominated arena better.
To overcome these funding challenges, women entrepreneurs often rely on alternative financing methods. Approximately 53% of women-owned businesses are financed through personal savings, while 15% turn to private business loans (Quickbooks). This resourcefulness and determination demonstrate women’s resilience in the face of adversity. However, it also underscores the need for more equitable access to capital.
The Surge of Women Entrepreneurs
The surge of women entrepreneurs in recent years is remarkable. According to the Gusto Survey of Business, the proportion of startups founded by women reached 49% in 2023, a significant increase from just 29% in 2019. This trend has persisted since the pandemic, with women accounting for nearly half of all new business owners between 2012 to 2022.
Despite this progress, women entrepreneurs still face challenges in accessing capital. In 2023, only 3% of women entrepreneurs received a private capital investment to start their business, compared to 9% of male entrepreneurs (Gusto Survey of Business). This disparity exists even within the same industry. Such as Professional Services, where 9% of men reported receiving a private capital investment, compared to just 2% of women.
Flexibility is a key motivator for women starting their own businesses. The Gusto Survey of Business found that 70% of women who started a new business in 2023 cited flexibility as one of their top reasons for pursuing entrepreneurship, compared to 66% of men. This suggests that women are driven not only by financial considerations but also by the desire to create a work environment that aligns with their values and personal lives.
As the business landscape continues to evolve, women entrepreneurs are seizing opportunities and adapting to new challenges. The rise of remote work and new technologies has opened doors for a more diverse set of business owners, including women. With their resilience and creativity, women entrepreneurs are poised to make an even greater impact on the economy in the years to come.
How Many Businesses Are Owned By Female Of Color In 2024?
According to Guidant’s 2023 Small Business Trends study, male entrepreneurs of color are more likely to own and operate businesses than their female counterparts. With 68 percent of surveyed business owners of color identifying as male and 32 percent as female.
Despite this disparity, women of color are starting and growing businesses at a faster rate than any other demographic in the U.S. Black women-owned firms grew 67 percent from 2007 to 2012. Black women-owned firms then grew another 50 percent from 2014 to 2019. This data marks the highest growth rate of any female demographic. The study shows a trend of a 28 percent increase in women-owned businesses among entrepreneurs of color compared to previous years.
The study also found a strong correlation between education levels and business ownership, particularly among entrepreneurs of color. Among surveyed entrepreneurs of color, 82 percent held a degree: a master’s degree (38%), a bachelor’s degree (34%), and an associate degree (10%). This highlights the important role education plays in empowering women entrepreneurs of color.
Despite the challenges they face, women entrepreneurs of color have demonstrated remarkable resilience and optimism. As more women of color pursue higher education and start their own businesses, they are poised to drive economic growth, create jobs, and make a significant impact on their communities and the economy as a whole.
The Path Forward
As we look to the future, it’s clear that supporting and empowering women entrepreneurs is more than a matter of fairness. It is even more so a strategic imperative for economic growth and innovation.
To foster a more inclusive entrepreneurial ecosystem, several key actions are needed:
- Increasing access to funding:
Venture capital firms, angel investors, and financial institutions must take proactive steps to address the funding gap. We hope to see more of them that provide equitable access to capital for women entrepreneurs. - Providing targeted support:
Mentorship programs, networking opportunities, and business development resources tailored to the unique needs of women entrepreneurs can help level the playing field and accelerate their success. In A&H, we help non-tech founders to avoid common wrong technology decisions. - Challenging stereotypes:
Addressing unconscious biases and dismantling stereotypes that limit women’s entrepreneurial potential. As it is crucial for creating a more inclusive and supportive business environment. - Celebrating success stories:
Highlighting the achievements of successful women entrepreneurs can inspire the next generation and challenge outdated perceptions of women in business. Read our female owned business fund raising success case study.
As we navigate the ever-changing landscape of entrepreneurship in 2024 and beyond, one thing is certain: women entrepreneurs are a force to be reckoned with. With their resilience, creativity, and determination, they are driving economic growth, creating jobs, and shaping the future of business.
By working together to support and empower women entrepreneurs, we can unlock their full potential and create a more equitable and prosperous future for all.
