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Why Women-Owned Startups Are a Better Bet
Article

Why Women-Owned Startups Are a Better Bet

Kate Abouzahr, Frances Brooks Taplett, Matt Krentz and John Harthorne
Boston Consulting Group, 2018
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Editorial Rating

8

Qualities

  • Analytical
  • Applicable
  • Inspiring

Recommendation

Start-ups led by women receive an average of $1 million less in early-stage investment than those run by men and generate double the revenue per investment dollar. This suggests that women-led start-ups are the better investment. So why haven’t male investors at US venture capitalist firms gotten the message? getAbstract recommends this inspiring analysis to women entrepreneurs, start-up accelerators, venture capital firms, and other investors.

Summary

Data collected from 350 companies – 92 founded or co-founded by women and 258 founded by men – shows that start-ups led by women were the better investment. Women-led start-ups receive only $935,000 in early-stage investing for every $2.1 million obtained by start-ups led by men. The women-led start-ups, however, made "10% more cumulative revenue over a five-year-period" than start-ups led by men,$730,000 compared to $662,000.

For each dollar of initial investment, female-led startups generated the equivalent to 78 cents versus 31 cents for male-led start-ups. A closer look at the ...

About the Authors

Kate Abouzahr is Global People Team senior manager for Boston Consulting Group (BCG) and manages its thought leadership on gender diversity. Frances Taplett is Global Consulting People Team director for BCG. Matt Krentz is senior partner and managing director of BCG Chicago. John Harthorne is CEO of the MassChallenge start-up accelerator.

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