The road to acquiring venture capital is not easy to travel, especially for women entrepreneurs and business owners. In spite of the fact that the pool of capital to support new ventures has increased dramatically since the early 1980s, the flow of this venture capital to women-owned businesses has been low compared with their numbers and force in the economy. With this kind of economic power, it would appear that women-led ventures offer worthy investment opportunities. But the perception is not mirrored in reality.
Theories abound as to why a smaller proportion of women receive venture financing.
First, there may be a mismatch between the industries and geographic locations preferred by venture capitalists and choices women make. Venture capitalists predominantly invest in high-tech industries. And more than a third of those dollars were invested in California companies, primarily in Silicon Valley. In contrast, women-owned businesses are heavily concentrated in the service and retail sectors. And the highest growth rates for women-owned businesses are in Nevada, Georgia, New Mexico, Florida and Idaho.