To date, there has been little research conducted on women entrepreneurs in the Latin American and Caribbean region whose businesses have achieved rapid and high levels of growth1. A new report WEGrow: Unlocking the growth potential of women entrepreneurs in Latin America and the Caribbean produced by Ernst & Young and the IADB’s Multilateral Investment Fund provides valuable new information on general differences observed by gender, and on what can be done to help women succeed even further. Some of the key insights and suggested fixes are summarized below.
Key Insights:
- Sub-sectors: Women tend to concentrate in food & beverages, business services, and manufacturing while men are much more likely to be in technology. The latter are easier and faster to scale and less expensive to start up.
- Education: Both men and women high-growth entrepreneurs have higher levels of education and are much more likely to have come from entrepreneurial families ‘kitchen table effect’ than the general population. However, men are much more likely to have studied outside of the region and to have learned English. This means men are more likely to have established networks overseas including linkages with sources of capital.
- Networks: Men are more likely to ‘professionalize’ their networks earlier than women, seeking mentors beyond family and friends, while women tend to stick to their ‘inner circle’.
- Equity vs. Debt Financing: Women are more likely to seek debt financing from banks, while men are more likely to seek equity financing.
- Serial Entrepreneurs: Men are more likely to have started multiple businesses by age 39 (average age of men and women in study) while women tend to stick to one business.
- Fear of failure: For women, fear of failure/lack of confidence is cited as the second most important barrier to starting up a business while this was not mentioned as a challenge by men. The good news is that when women move beyond the ‘start-up’ phase, this fear diminishes and no gender differences are observed.
- Work/life balance: As the business grows, women are much more concerned with work/life balance than men, who do not cite this as an issue.
Suggested Fixes:
- Supporting women to build their networks (beyond family and internationally), including linking to on-line networks e.g. http://www.ellas2.org
- Encouraging women to build their personal brand (importance of it, confidence and know-how to do it)
- Introducing women to ‘smart financing’ (Angel individuals/networks/funds; Venture Capital)
- Providing affordable child care solutions (linkage to Accelerators and Incubators)
- Replicating the ‘kitchen table’ effect (role models coming into high schools/universities; role models in mass media).
For more on how the IADB supports high growth women see: http://www.fomin.org/mif/Projects/AccesstoFinance/Ecosystems/tabid/446/language/en-US/Default.aspx
1 defined as 20% + growth per year for past three years
