A new study analyzes their characteristics and challenges
The new study “WEGrow: Unlocking the Growth Potential of Women Entrepreneurs in Latin America and the Caribbean,” finds that these entrepreneurs are opportunity-driven rather than necessity-driven, and that they mention economic independence, passion and creating jobs as their main reasons for launching their business ventures.
According to the study, 85 percent of high-growth women entrepreneurs have the ambition to keep growing their business. These high-growth businesses belong to traditional or non-mature sectors such as food and beverages and services, which tend to have lower rates of potential growth than sectors like software and Internet, which are preferred by high-growth men entrepreneurs.
The study commissioned by the Multilateral Investment Fund (MIF) , member of the Inter-American Development Bank (IDB) Group and produced by Ernst & Young, analyzes the profiles, challenges and needs of high-growth women entrepreneurs in nine countries in the region. High-growth women entrepreneurs are defined as women entrepreneurs whose businesses have experienced growth rates of more than 20% for at least three years.
“These women can be an important source of growth because they create jobs, promote innovation and reduce the gender gap,” said Nancy Lee, General Manager of the MIF. “But until now, there has been very little research on who they are and how they see their successes and challenges. We believe that this study will be very valuable in helping them grow their businesses, which will not only benefit women entrepreneurs themselves and their families, but will also have significant economic impact.”
According to the study, several barriers related to the sex of women entrepreneurs lessen or disappear as their business grow. Although many women mentioned that they had more difficulties than men when they started, 88 percent of high-growth women entrepreneurs stated that being a woman was not an obstacle to growing a business.
Women entrepreneurs initially imagine their businesses to be more restricted in reach. However, once the business grows their ambitions match those of male entrepreneurs. Only 40 percent of women’s businesses have international reach, while 71 percent of men’s businesses cross borders.
“Although these results are very positive in terms of the advancement of women in the entrepreneurial world, there are still challenges,” said Susana García-Robles, Principal Investment Officer of the MIF. “Their networks aren´t as extensive and diversified as those of men, since they tend to partner with friends and family. As a result, women entrepreneurs have difficulties in accessing finance, especially from angel networks and seed and venture capital funds.”
The study analyzes high-growth women entrepreneurs whose businesses have experienced growth rates of more than 20 percent for at least three years and compares them to those of their male counterparts, as well as those who reach lower growth rates. It is based on interviews with over 400 entrepreneurs and other stakeholders in the region’s entrepreneurial ecosystems in nine countries (Argentina, Brazil, Chile, Colombia, Costa Rica, Jamaica, Mexico, Peru, and Uruguay).