In her new book, Own It: The Power of Women at Work (Crown Business, 2017), Sallie Krawcheck writes about her triumphs and failures as one of the most powerful women executives on Wall Street, and what she learned by starting her own company. In the following edited excerpt, Krawcheck explains why the future looks so promising for other female entrepreneurs.
Make no mistake: Starting a business is a lot of work.
But personally, I love hard work, as do so many of us. And I much prefer to pour all of that work and all of those hours into something that my team and I own (financially, yes, but also emotionally), and I know many women who feel the same way. And while the rise in female entrepreneurship is being enabled by technology, it's rooted in the fact that the qualities women bring to the workplace can also make us terrific entrepreneurs.
Think about what is required to "make it" as an entrepreneur. You need to have a vision and a passion -- well, we women have the "meaning and purpose" thing down. Starting businesses can be risky, so you need to manage risk well, and look around corners -- check. It's also pretty darn complicated, so you need the ability to manage complexity and see things holistically -- check. Building businesses that last means it's essential to focus on the long term -- another check there, too. And finally, we drastically improve our chances of success if we are committed to keeping up with the pace of change and being constantly open to learning what we don't know -- yup, we do that, too.
So the shifts in technology -- and the resulting increases in opportunity that are afoot -- simply make it easier for each of us to bring these qualities to bear and take advantage of the handful of converging forces that are ushering in this great era of female entrepreneurialism. They include:
1. The broadening recognition that startups with female leadership are more successful than those run by men only.
Some pretty significant players in the space acknowledge this. First Round Capital recently reported 63 percent better performance by its companies with women leaders than those with all-male leadership teams.
2. We are beginning to see a critical mass of inspiring, über-successful female entrepreneurs providing role models.
Women have founded and run wildly successful businesses, including: 23andMe, Rent the Runway, The RealReal, Birchbox, Spanx, Stitch Fix, Drybar, BaubleBar, Tory Burch, The Honest Company, Houzz, Lynda.com, Huffington Post, Hearsay Social, SoulCycle, LearnVest, The Muse, Mom Corps, Plum Alley, ClassPass, Mightybell, Stella & Dot, Etsy, Nasty Gal, WowOwow, Net-a-Porter, One Kings Lane, theSkimm. And the list gets longer every day.
There's no playing by the boys' club rules for these powerful ladies. No asking permission. And they are forever banishing the concept that women's businesses are supposed to be little or cute, or limited to "women's products." Their success is resonating particularly with women of the Millennial generation -- the female leaders of the future -- such that when I'm on business school and college campuses, entrepreneurialism is the topic of just about every meeting I have with female students.
3. There is a growing ecosystem supporting women entrepreneurs and women-owned businesses.
The list of organizations, tailored to women, providing some combination of coaching, networking, instruction, and introduction to funding sources is growing every day. Underpinning the emergence of these organizations and the hundreds of other smaller, grassroots networks of entrepreneurial women supporting one another is a growing recognition that there are no limits to how big the proverbial pie can grow.
There are no queen bees in these networks, but rather relationship-focused women who recognize that it's not just one or two or three female entrepreneurs who can be successful, as in the old days of one seat at the table for a woman in corporate America. At this table, there is pie for everyone. We can lift one another up, and achieve more together than we could alone.
4. There are ever more sources of funding for women entrepreneurs.
First, let's go ahead and acknowledge what's not working for female entrepreneurs: the traditional venture capital structure. Despite the numbers demonstrating that startup teams that include women have substantially better returns than male-only ones, women-led startups receive only about 7 percent of venture capital dollars.
Luckily, other sources of funding for us are springing up, and they play to our strengths. We are seeing massive growth of crowdfunding venues, including women-focused ones such as Plum Alley and Portfolia. And this matters: According to CircleUp, a private equity platform for consumer businesses, female founders are nine times more successful in crowdfunding than in raising capital with traditional banks, and five times more successful than with VCs. We are also more successful than men are in crowdfunding; for tech startups on Kickstarter, the success rate for women was 65 percent, as compared with 35 percent for men. Some folks hypothesize that it's because women's presentations on these types of sites are more complete and less shoot-for-the-moon, and the amounts they look to raise are more reasonable.
Is it an even playing field? No. Would it be better if the more traditional venture capitalists stepped up? Yes. But all of these other sources of funding mean we're building real momentum, and eventually (albeit slowly), I believe, the venture capital industry will follow suit.
And as my friend Gina Bianchini, founder and CEO of Mightybell, always reminds me, let's not forget the cheapest form of capital, which is revenue. Build a great product or provide a great service, and customers buy it. Invest that revenue back in the business -- it's a much more sustainable way to grow that business, with less risk.