Between 1988 and 1998, the number of women-owned companies grew from 4.5 million to 8 million, according to the Forum for Women Entrepreneurs . A venture capitalist gives financial backing and management assistance to young, rapidly growing companies. Unlike a bank that makes loans that get repaid as debt, a venture capitalist owns a portion of the company in which he or she invests.
Venture capital is an important source of equity for start-up companies.
Economists and business experts say that little financing has flowed to women-backed startups because historically, women entrepreneurs chose industries in which venture capitalists rarely invest. For example, retail, where there's often little opportunity for growth. If a woman doesn't pick the right industry, her assessment of her business may not match the needs of venture capitalists. Also, the venture capital system depends upon networking, a skill which analysts say too many women lack. That's why Sheryl Marshall, managing director of Axxon Capital , says women need to start and support their own venture capital funds.