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funding genderization

Funding “genderization” makes Latinas, minority women-owned businesses, big losers in 2021 revenue and funding

The message is loud and clear for Latinas and other minority women-owned businesses. Despite the continuous big announcements from traditional to alternative funders that diversification of funding and access to capital for minority female founders is on the way, we have not moved an inch, not a centimeter! 

We are not getting it, and I’m tired of funding “genderization.”

Many can blame the pandemic or that women had to become caregivers of parents and children, and still try to save their businesses. They can argue they had to leave or close their businesses because of the lockdown and criticize government pandemic measures. They can also find excuses for operating raising costs or the supply chain disruptions but haven’t these been the same conditions for all small businesses operating during a challenging year? 

According to a Biz2Credit study that reviewed 100,000 credit inquiries, “women-owned business profits averaged $88,995, much less than 2020’s figure of $119,654, and $47,152 less than the average for male-owned firms ($136,147) in 2021.”

The study also found that “profits for female business-owners dropped 26% in 2021 from 2020, while average annual revenues dipped 4%.”

  • Average Annual Revenue dropped from $493,401 in 2020 to $475,707 in 2021.
  • Average Profits (annual revenue – operating expenses) of women-owned businesses fell to $88,995 in 2021 from $119,654 in 2020
  • Average Expenses increased from $373,748 in 2020 to $386,712 in 2021.
  • Average Credit Score for female business owners dropped from 588 in 2020 to 580 in 2021.
  • Top Industry: Services (except public administration) represented 31.9% of the women-owned companies in 2021.

Latinas and other minority women-owned businesses stall big time

Since the frenzy reported by American Express, The 2019 State of Women-Owned Business Report,, between 2014 and 2019, the number of women-owned businesses climbed 21% to nearly 13 million (12,943,400). Employment grew by 8% to 9.4 million. Revenue rose 21% to $1.9 trillion. 

women owned business

2014 – 2019 Growth Rates for Women-Owned Businesses VS. All Firms. (Source: The 2019 State of Women-Owned Business Report)

While the number of women-owned businesses grew 21% from 2014 to 2019:

  • Firms owned by women of color doubled that rate (43%). 
  • Numbers for African American/Black women grew even faster at 50%. 
  • Native Hawaiian/Pacific Islander (41%), 
  • Latina/Hispanic (40%), 
  • Asian American (37%) and 
  • Native American/Alaska Native (26%) businesses grew more slowly than for women of color in general but faster than overall women-owned businesses and all businesses. 
women owned business

Trends in the Growth Rate of the Number of Women-Owned Businesses VS. All Firms (Source: The 2019 State of Women-Owned Business Report)

As of 2019, women of color accounted for 50% of all women-owned businesses. Today, they are up to 54% (estimated). 

However, the disparity between minority and non-minority women is increasing. 

  • In 2014, minority-owned businesses averaged $67,800 in revenue; 
  • By 2019, the average had dropped to $65,800. 
  • In 2014, non-minority women-owned businesses averaged $198,500 in revenue; 
  • By 2019, the average had jumped to $218,800. 

From 2014 to 2019, the average revenue for women-of-color-owned businesses shrank, except for Asian women-owned businesses. As the number of minority-women-owned businesses surges, the entry of smaller, younger companies into the pool could be lowering average revenue figures for these businesses. 

women owned business

Closing the Revenue Gap for Minority-Women-Owned Businesses would have a huge impact on the economy. (Source: The 2019 State of Women-Owned Business Report)

We need funding, and we need it NOW!

The culprit of these gaps is the missed opportunity for female founders -especially Latinas and other minority women entrepreneurs- to secure funding.

According to a report by research firm PitchBook, “female founders secured only 2% of venture capital in the U.S. in 2021, the smallest share since 2016 and a sign that efforts to diversify the famously male-dominated industry are struggling.”

The report stated that “U.S. startups founded solely by women raised nearly $6.4 billion of venture funding in 2021, 83% higher than the total raised in 2020. The accelerated pace of funding is part of an exceptionally strong year for V.C. investment across the U.S., which eclipsed its previous record and topped nearly $330 billion in 2021.”

Although it was the second year in a row that women’s percentage of V.C. funding decreased, the overall dollar value of female funding rose because total funding levels in 2021 hit all-time highs, according to the report. 

economic equality,

funding “genderization” prevents women, especially Latinas and other minority women entrepreneurs, from expanding their businesses.  (Photo created by freepik)

It’s funding “genderization,” and this information proves it! 

“When women teamed up with a male co-founder, they tended to raise more,” says the report. Aggh… it makes me so mad! The mixed-gender female-male founder teams secured 15.6% of total venture cash in 2021, the highest amount since 2017! 

The truth is, these numbers have been almost steady for female founders, especially Latina entrepreneurs and other minority women-owned businesses, for quite some time. “Black female startup founders have received just 0.34 percent of the total venture capital spent in the U.S. in 2021; however, the dollars invested in their companies are on the rise,” an analysis of Crunchbase data shows.

“The dollar amount received in angel, pre-seed, and seed rounds for venture-backed Latinx-owned startups in the U.S. had barely budged since 2018 when $185 million went to Latinx-owned companies raising those earliest rounds,” Crunchbase data shows

In 2021, Latinx startups raising angel, pre-seed, and seed rounds only received $205 million, a mere $20 million increase from three years earlier. Almost all of the growth in funding that Latinx founders have seen in recent years went primarily to later-stage startups.

Female founders secured only 2% of venture capital in the U.S. in 2021, the smallest share since 2016, a sign that efforts to diversify funding in this male-dominated industry are failing. The statistic may sound familiar; it’s the exact same portion of capital startups founded by a solo female founder or an all-female team secured last year, too, according to PitchBook.

According to a DocSend data report , potential investors spent 50 percent more time scrutinizing the slide that details milestones and growth metrics of the company of all-female teams’ pitch decks than they do of all-male teams’ pitch decks. 

In a male-dominated industry, V.C. firms with female decision-makers represent less than 10% of all firms, and 74% of U.S. V.C. firms have zero female investors. 

But do we need women sitting on those seats to give to women? Isn’t it enough for women to be talented and solid in their business proposition to receive the funding they need? 

What does a male founder’s presence guarantee that a female founder doesn’t in the views of funders? 

At the end of the day, venture capital is still a relationship-driven industry. What are “people with money” networks not offering to women that they are contributing to men? Why are they not opening doors for them?

Funding “genderization” prevents women, especially Latinas and other minority women entrepreneurs, from expanding their businesses. But it is also hurting an economy that could grow exponentially, and it has been proven ten times over. 

Women need to understand that funding “genderization” in business is a serious discrimination and civil rights issue – a matter of “Sex and Gender Discrimination Law” as much as it is in the workplace. Until we do, we will keep making coffee and updating calendar schedules. 

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SBA Administrator announces plans to elevate the Office of Women’s Business Ownership

Earlier last week,  U.S. Small Business Administration Administrator Isabella Casillas Guzman announced that the SBA intends to elevate its Office of Women’s Business Ownership (OWBO) to directly report to the Office of the Administrator. The proposed change reflects the importance of women entrepreneurs held by the Biden-Harris Administration and SBA.

Established by Executive Order in 1979 and codified through the Women’s Small Business Act of 1988, OWBO’s mission has been to empower women entrepreneurs through advocacy, outreach, education, and support.

Under Administrator Guzman, the SBA has expanded the number of Women’s Business Centers (WBCs) to a record 140 locations nationwide. These WBCs offer a network of extensive on-the-ground resources that include free to low-cost counseling, training, business development technical assistance and are dedicated to assisting women entrepreneurs to start, grow, and expand their enterprises.

SBA, Isabella Casillas Guzman

SBA Administrator Isabella Casillas Guzman. (Photo Source)

“In 1972, there were a little over 400,000 women-owned businesses in the United States. Today, there are over 12 million proving that women entrepreneurs have become the fastest growing and one of the most impactful segments of the business community,” said Administrator Guzman in a press release. “While there has been historic progress in women’s entrepreneurship, significant disparities still persist, impacting women entrepreneurs’ access to resources and opportunity, especially in the face of the economic challenges posed by COVID. That is why I am proud to advance the mission of the Office of Women’s Business Ownership and reaffirm our commitment to America’s women-owned small businesses.”

This announcement comes after the release of the first-ever National Strategy on Gender Equity and Equality commissioned by the White House outlining objectives and priorities for obtaining equity for women. 

“Women entrepreneurs are key to spurring innovation and supporting local economies and families across the country. That is why it’s so important that we continue to invest in women-owned businesses and give them the tools they need to succeed and grow. The elevation of this office sends a clear signal of this Administration’s commitment to ensure an equitable economic recovery, putting women at the forefront of our efforts to build back better for everyone. The White House Gender Policy Council looks forward to an ongoing strong partnership with the Office of Women’s Business Ownership in the months and years ahead,” said Jennifer Klein, Deputy Assistant to the President and Co-Chair and Executive Director of the WH Gender Policy Council.

Women represent the fastest-growing entrepreneurial segment in the country, with particularly high growth in entrepreneurship amongst multicultural women. Data from the SBA’s Office of Advocacy found that between 2014 and 2016, the number of employer firms owned by women grew six percent, twice the growth rate of employer firms owned by men. This exponential growth was mainly driven by an increase in employer businesses owned by minority women, which grew 14 percent in that time.

Photo created by tirachardz on Freepik.

COVID-19 dealt a severe blow to women-owned businesses which is why prioritizing recovery and addressing long standing inequities for women entrepreneurs is crucial to the survival and continued growth of these businesses. The elevation of the Office of Women’s Business Ownership will help ensure the continued success of the Women’s Business Center network. 

While it is evident that women entrepreneurs play a key role in our society and economy, they still remain underrepresented in many key factors, including access to capital, contracts, and connections. Led by OWBO, the SBA assists women-owned businesses in leveraging government resources – including recently announced opportunities through an equitable federal procurement strategy, the Bipartisan Infrastructure Law, and the Build Back Better Act – to level the playing field. 

Currently, the OWBO is an organizational component of the Office of Entrepreneurial Development. The SBA emphasizes that the reorganization is still in the planning stages and likely will not be finalized until the close of fiscal year 2022.

To find Women’s Business Center locations and additional SBA resources in your area, visit www.sba.gov/tools/local-assistance.

Why more minority founders aren’t backed by venture capital funding

Funding for any new business venture is a critical step that will often determine its ultimate success. Many businesses sink far too early in the process when founders are unable to secure access to capital. Unfortunately, women and minority business owners are more likely to be denied venture capital funding and bank loans compared to white, male founders.  

Why aren’t more minority founders backed by venture capital funding? (Business card photo created by rawpixel.com – www.freepik.com)

According to an article by Forbes, in the past year, only 2.6% of venture dollars went to minorities and 2.2% went to women. In total, that is only $4.2 billion out of the $87.3 billion venture capital was distributed. Additionally, as of January 2021, only 93 Black and 58 Latinx women have ever raised over $1M.

This lack of VC funding for women- and minority-owned businesses is part of an ongoing cycle and diversity issue within the entire venture capital process. The fact of the matter is, diverse venture capitalists (VCs) and limited partners (LPs) will be more likely to invest in diverse founders and entrepreneurs. But so far, these roles have been saturated predominantly by white, male individuals. 

Breaking old patterns 

In an article by Fast Company, Leah Solivan discusses her experiences in securing venture capital funding for her startup and shares ideas on how the old pattern can be broken. In sharing her experience she describes how she first struggled to secure funding because she “didn’t match the pattern.” As a woman and a Latina, these modifiers made her an “other” in the eyes of traditional venture capitalists. She was not the typical founder. 

“VCs had an idea of what successful founders looked like, and they didn’t look like me,” Leah shared in her article. “It took another woman of color hearing my pitch to open up opportunities for me. And that woman, Ann Miura-Ko, was only in a position to say “yes” to me because another VC (Floodgate’s Mike Maples) took a chance on her. As a founder and CEO, I recruited a diverse team of talented individuals who brought different backgrounds and life experiences to the table. Many of these people have gone on to become founders themselves, building their own teams. Others have gone on to become venture capitalists. This is the virtuous cycle of wealth creation in action. And all it took to get it going was one VC deciding to take a chance on someone who didn’t match the pattern.”

This process that she describes is exactly how we can work to break old patterns within the venture capital process. We need diverse LPs who can then fund venture capital funds. And diverse VCs will then seek out and fund diverse founders. These founders can then give opportunities to their diverse team members and employees who can then grow to become their own founders or investors. 

Minority business owners and entrepreneurs, especially Latinos, have great potential to grow and thrive with the right backing. According to the Stanford Research 2020 State of Latino Entrepreneurship Report, Latinos are starting businesses at a faster rate than the national average across several industries, growing 34 percent over the last 10 years compared to just 1 percent for all other small businesses. Additionally, the report showed that over the past two-years, Latino-owned firms grew revenue at an average of 25 percent per year while white-owned businesses grew revenue at 19 percent.

Moreover, much of the growth in the number of new businesses among Latinos has been driven by women. Latinas represent 40% of all Latino business owners and the number of Latina-led employer firms has grown 20% within the last five-year period.

Forbes also reported that in the last year, 40% of new businesses were started by women and 47% of those businesses were started by minority women. 

You might be interested: Dr. Marlene Orozco demystifies misconceptions about Latinas through data 

We need diverse venture capitalists to support diverse founders

“Capital remains in the communities that manage it,” says Ivelisse Rodriguez Simon, Managing Partner of Avante Capital. Earlier this year, Ivelisse spoke as a panelist during Latina in Business’ virtual panel, “Latina Small Business Post-Covid: Recovery Resources and Trends. There she shared trends in investment capital and discussed why many women and minority owned businesses struggle to access capital. 

Ivelisse Rodriguez Simon, Managing Partner of Avante Capital.

There’s about $70 trillion of capital to manage in the United States and only 1% of that capital is managed by women or people of color. So even though women and people of color represent 75% of the US population, we only manage 1% of the capital. And the result of that is that our communities don’t get access to that capital.” 

To break this cycle, we need diverse venture capitalists and limited partners. Ivelisse says that this is an issue Avante has been really committed to. “Not only supporting women and people of color managing businesses but really trying to get women and people of color into this industry to manage capital so that we can go out and find entrepreneurs from our communities and help them grow. Because if there are not many people in my seat that look like us, our people are never gonna get capital,” she says

Don’t miss our Summer Speakers Series and Networking Blast Events throughout August!  Interested in learning how to access business funding for your venture? Sign up for our August 11th workshop, “Resources to Increase Your Business Revenue.” 

While pushing for more diversity throughout the various positions in the venture capital funding process, we also need to hold venture capitalists accountable. It should not only be the job of diverse and minority venture capitalists to fund diverse founders and entrepreneurs. More venture capitalists need to be willing to take risks. After all, is that not the point of “venture” capitalists. 

As Leah Solivan nicely said, “Venture capital was once a business that took big bets on outsiders—it wasn’t long ago that the college drop-out computer nerd cliché was a novel, risky opportunity. As the industry has matured, we’ve defaulted to pattern matching (which too often means young, white males that resemble those once-novel success stories) instead of seeking out founders of different backgrounds, different geographies, different skill sets, and different demographics. Our current cycle tries to play it safe. There’s nothing virtuous about that, and it also runs contrary to the ethos of venture capital—which is about taking a chance on something or someone with the potential for disruption.” 

We need diversity in all stages of the venture capital process. We need to break-down old patterns and biases about what a founder looks like. And we need to hold traditional venture capitalists accountable and push them back to their roots, to take risks on something new, and take a chance on the underdog.

NJ waives $100 certification fee for small, minority-, women-, and veteran-owned businesses

NJ waives the $100 filing fee to become certified as a Small-, Minority-, Woman-, and Veteran-Owned Business Enterprise indefinitely.

Women, minorities and veterans face unique challenges when it comes to opening businesses and accessing capital. But it just got a bit easier for them in New Jersey. 

In the past year, small business owners have struggled greatly to keep their businesses open and running in the face of the COVID-19 pandemic. However, small, minority-, women-, and veteran-owned businesses have been hit harder than most. Not only do these groups face greater struggles staying open, but they also face obstacles when it comes to opening their businesses and accessing capital. 

Luckily, for New Jersey business owners, the process just got a little bit easier. This month, starting last week on June 1st, NJ waived the $100 fee to certify as a small, minority-, women-, and veteran-owned business. 

This plan to waive the certification fee was announced last month during National Small Business Month, by State Treasurer Elizabeth Maher Muoio who said, “We are kicking off National Small Business Week by opening the door wide for small-, minority-, women- and veteran-owned businesses who are looking to do business with the state.”  

“The Treasury is continuously striving to find ways to make doing business with the state easier and more intuitive, especially when it comes to businesses looking to get their foot in the door and pursue contracting opportunities with the state.” 

Businesses can now apply for certification through the Treasury’s online portal. Additionally, NJ business owners may register their business for as many certification categories as they are eligible. 

Certification is an important step for any small business as it provides documentation of a business’ status and allows businesses to participate in select set-aside or goal-based contracting initiatives offered by state agencies. 

“Waiving the fee associated with minority-, women- and veteran-owned business certification removes a monetary barrier to accessing the state’s supply chain that is real for many minority, women, LGBTQ and veteran business owners,” said Chief Diversity Officer Hester Agudosi. 

“As a New Jersey-certified MWBE, both public- and private-sector organizations and firms have access to your profile for considering solicitations for prime and subcontract opportunities.”

Certified businesses are eligible to participate in the Small Business Enterprise Set-Aside Program, which sets a goal of awarding 25% of state contracting and purchase orders to small businesses, and the Disabled Veteran-Owned Set Aside Program, which awards 3% of state contracting and purchase orders to businesses that are owned and operated by service-disabled veterans. 

Additionally, the state’s Office of Diversity and Inclusion is in the process of conducting a statewide disparity study, which may allow for additional set-aside programs to be authorized in the future for small, minority-, women-, and veteran-owned businesses. 

These various programs and waiving the fee to certify are a step in the right direction toward dismantling the barriers and challenges stacked against small, minority-, women-, and veteran business owners.

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minority and women

NJ Treasury announces greater opportunities for minority, women, and veteran owned businesses

The Department of the Treasury has announced several key initiatives that will advance the Murphy Administration’s commitment to ensuring Minority, Women, and Veteran-Owned Businesses (MWVOB) can more fully participate in New Jersey’s multi-billion dollar supply chain. These initiatives will include a disparity study, diversity portfolio manager, and new Minority and Women Business Enterprise (MWBE) regulations which will help create greater opportunities for minority, women, and veteran owned businesses. 

First disparity study in nearly 20 years 

Chief among these initiatives is the commissioning of the first disparity study in nearly 20 years. This study will measure current spend data, which is viewed as key to identifying and opening up new opportunities for MWVOBs to contract with the State of New Jersey to provide goods and services. The  study has been a priority for the Murphy Administration from day one. 

NJ Diver's licenses

Governor of New Jersey Phil Murphy

“This disparity study is not only long overdue, it is an integral part of our vision for a stronger, fairer, and more resilient, post-COVID economy that opens doors for diverse businesses to play a greater role in shaping our state’s future,” said Governor Phil Murphy. “This study will provide us with an opportunity to create a more equitable business environment, which is a win for us all.”

The study was announced last fall by State Treasurer Elizabeth Maher Muoio at the inaugural Garden State Minority-, Women- and Veteran-Owned Business Summit organized by Treasury’s Office of Diversity and Inclusion, which is headed up by the State’s Chief Diversity Officer Hester Agudosi.

“Recognizing how long it has been since the last study was conducted, we tried to ensure that this new study will capture as much data as possible, beyond just statistics that are available on our spend, but also including outreach to stakeholders and community groups as well,” said Treasurer Muoio. “This will give us the tools and the information necessary to determine where our strengths and weaknesses lie so we can implement more equitable procurement strategies moving forward. The state has a vast supply chain of goods, commodities, and professional and financial services and in a truly equitable society every qualified vendor in our state should have the opportunity to participate in the economy fueled by their tax dollars.”  

The Office of Diversity and Inclusion will oversee the effort, which is the first study of its kind to be commissioned by the State since 2003 and will be conducted by Mason Tillman Associates, LTD. 

The goal of the study  is to research, structure, and conduct a comprehensive and legally defensible disparity study of the State’s contract awards in construction, goods, and services over a five year period (July 1, 2015 through June 30, 2020) to determine whether there is a disparity between the number of qualified minority, women, and veteran-owned businesses ready, willing, and able to perform services, and the number of vendors/contractors actually engaged to perform such services. 

The disparity study will include a review of contracts for construction, goods, commodities, and services and shall be appropriately structured so that the state may, if appropriate, use the information to create race- and/or gender-neutral, and if necessary, race- and gender-conscious methods of achieving those goals for state contracts and employment by state vendors.

“This is a critical time as the COVID-19 crisis has laid bare the structural disparities that have persisted in this country and state with the greatest impact on Black and Latinx communities,” said Chief Diversity Officer Hester Agudosi. “Entrepreneurship is an essential driver of societal health and wealth, and a formidable engine of economic growth.  The findings and recommendations brought forth from the study will enable the state to address any disparities that may exist in public contracting and level the playing field for diverse business owners and entrepreneurs.”

Diversity Portfolio Manager to manage State’s pension fund 

Additionally, Treasurer Muoio also announced the hiring of lifelong New Jersey resident Edward Ramos for the newly created position of Diversity Portfolio Manager within the Division of Investment (DOI). Ramos holds both an MBA and CFA and has over 25 years of experience investing in over 50 different countries where he has a demonstrated track record of success and a long history with public pension plan clients. 

Ramos will be an integral part of DOI’s ongoing efforts to identify a wider universe of diverse investment fund managers, brokers, consultants, and advisers to help manage the State’s roughly $80 billion pension fund.

“Having been born and raised in the Garden State, I personally know quite a number of the 800,000 pension beneficiaries who are relying on our team at the Division of Investment to provide them the best returns possible for their retirement funds in return for the hard work and dedicated careers they provided to the state,” said Ramos. “As an investment professional for over 25 years, I am bringing my unique global experiences and strong network in the universe of diverse portfolio managers and funds to cast the net wider in our search for true talent in pursuit of higher returns.”

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Under the Murphy Administration, DOI has demonstrated a commitment to increasing opportunities for MWBEs. Since January of 2018, $1.4 billion of $4.4 billion in new capital has been committed to MWBE (Minority and Women Business Enterprises) fund managers, representing 31% of all newly committed capital. By comparison, from 2013 to 2017, $1.23 billion – or 7.25% – in new capital was committed to MWBE fund managers.

With the creation of the new position of Diversity Portfolio Manager and the hiring of Ramos, DOI hopes to build on its efforts to position New Jersey as a leader amongst public pension plans in utilizing a wider universe of diverse financial professionals.

Long-awaited overhaul of MWBE regulations 

Lastly, Treasury recently adopted new MWBE regulations that create a more business-friendly process for MWBE certification. The regulations are designed to streamline the procedures to become certified by: allowing for provisional certification, which is particularly helpful to companies in their infancy who may not have all the requisite documentation available just yet; creating an elongated three year certification period rather than requiring yearly recertification; establishing reciprocity with other certification entities, most importantly the federal Disadvantaged Business Enterprise (DBE); and establishing a clear cut process for applicants to challenge a certification denial. 

The long-awaited overhaul of the regulations was proposed in mid-August after the previous administration had let the old regulations lapse. The newly proposed regulations underwent a public comment period that closed on October 16. They were approved for publication in mid-November and officially published in the New Jersey Register on December 21.

Any business looking to be certified as a small-, minority-, women-, veteran-, or disabled veteran-owned business should visit the Department of the Treasury’s online portal to get started on the application. Businesses can now become certified in more than one category for just one single fee.

 Any business looking to be notified about state procurement opportunities for goods and services should register their company with NJSTART, the State’s eProcurement system, at www.njstart.gov.