Businesses owned and operated by women know first-hand a gender gap exists when it comes to accessing venture capital. The vast majority of cash goes toward start-ups founded and led by men.
But investors and business leaders including "Shark Tank" investor Kevin O'Leary are working to change this trend. While every investment situation is unique, O'Leary and other entrepreneurs say lack of men on the leadership team, or a focus on "crafty" businesses like baking can be held against women entrepreneurs as they try to raise cash.
Looking beyond those biases, however, and investing in more female entrepreneurs can pay off big. More than a third of O'Leary's portfolio of businesses are either owned or run by women. The returns from these companies are on average 75 percent higher than his businesses led by men, he said. "It's just facts for me. At the end of the day this is returns," O'Leary said. "I am backing more women because I am making more money with them."
But O'Leary is not the norm. A 2014 study on women entrepreneurs from Babson College found only 2.7 percent of the companies that received venture capital funding, from 2011 through 2013, had a woman chief executive. Additionally, businesses with a woman CEO received 3 percent of the total venture capital dollars invested — $1.5 billion of a total $50.8 billion invested overall.
Separate research from the Kauffman Foundation cites women also launching ventures with roughly half as much capital as men, and also less likely to access networks of close friends and acquaintances to help them secure funding.