Insights and Commentary
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Women and Wealth Series Part IV: Women Entrepreneurs
In 1914, Annie Malone became the first self-made female millionaire. Her more famous protégée, Sarah Breedlove Walker, better known as Madam C. J. Walker, followed close behind. Both women were born to former slaves and built their fortunes through the production of hair and beauty products aimed at the African American population. Malone founded Poro College in St. Louis, where she trained sales representatives in hair care and cosmetics. Walker, a master of marketing, built an empire that included a manufacturing plant in Indianapolis, personal properties in Chicago, New York City, and Lawaro, an estate in J. D. Rockefeller’s Westchester County neighborhood of Irvington. She became a vocal advocate for African American civil rights and liberties and donated generously to numerous institutions.
Over the past century, many women have followed in the footsteps of Annie Malone and Madame C. J. Walker. Cosmetics, retail fashion, and entertainment dominate the storylines of the most successful female entrepreneurs – just this week Kylie Jenner has been named the youngest billionaire ever through the success of her cosmetics line – but women have made their mark in building and construction, finance, writing, food and many other industries. These days, technology is among the most common vehicles through which women create their fortunes.
We are living in exciting times for female entrepreneurs. The United States produces a higher percentage of women entrepreneurs than any of the other 24 developed economies in the world (one out of ten women), and women own about 35 percent of all small businesses in this country. In 2018, the number of women with a net worth of at least $30 million rose by 31 percent globally, and women generally are becoming self-made millionaires and billionaires at a faster pace than men. According to the Diana Project out of Babson College, women now find “a robust and thriving entrepreneurship ecosystem” of academic, philanthropic, commercial, and financial resources dedicated to providing education, training, and financial support for their ventures.
We are living in exciting times for female entrepreneurs. The United States produces a higher percentage of women entrepreneurs than any of the other 24 developed economies in the world (one out of ten women), and women own about 35 percent of all small businesses in this country.
Growth vehicles, like venture capital, are the one area where women entrepreneurs remain largely left out. While women’s share of the pie has risen three-fold over the past 20 years or so, female-led ventures comprise less than 3 percent of the companies that receive investment capital and only 15 percent of the funds.
If you have been following this series, you may remember that women tend to like to invest in women – be it through philanthropy or financial investments – and that women perform well in those two worlds. It will come as little surprise, then, that venture capital firms with female partners are more likely to invest in female-led enterprises, and that those investments tend to perform as well as – and sometimes better than – ventures without women in leadership. Imagine what might happen if women began to secure more of that growth capital.
As Margaret Elliott suggested back in 1934: “Possibly it is not far-fetched to suggest that women… could, if they chose, contribute toward the building of a better social and economic order.”
A’Lelia Bundles, “The Life and times of Madam C. J. Walker,” History News (Winter 2003), 6-9.
Diana Project, “Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital,” Executive Summary.
Saul Estrin and Tomasz Mickiewicz, “Institutions and Female Entrepreneurship,” Small Business Economics (November 2011), 397-415.
Elizabeth J. Gatewood, et al., “Diana: A Symbol of Women Entrepreneurs’ Hunt for Knowledge, Money, and the Rewards of Entrepreneurship,” Small Business Economics (February 2009), 129-144.
Tiffany M. Gill, “Civic Beauty: Beauty Culturists and the Politics of African American Female Entrepreneurship, 1900-1965,” Enterprise & Society (December 2004), 583-593.
Louisa Kroll and Kerry Dolan, eds., “America’s Richest Self-Made Women,” Forbes, July 11, 2018.
Blaine McCormick and Burton W. Folsom Jr., “A Survey of Business Historians on America’s Greatest Entrepreneurs,” The Business History Review (Winter 2003), 703-716.
Rupert Neate, “Kylie Jenner’s Make-up Makes Her the World’s Youngest Billionaire,” The Guardian, March 4, 2019.
Jacob Passy, “Female Entrepreneurs are Quickly Amassing Major Fortunes,” MarketWatch, September 6, 2018.
Russ Alan Prince, “The Rise of Self-Made, Super-Rich Women and Single-Family Offices,” Forbes, June 5, 2017.
Stuart S. Rosenthal and William C. Strange, “Female Entrepreneurship, Agglomeration, and a New Spatial Mismatch,” The Review of Economic Statistics (August 2012), 764-788.
Small Business Profiles, 2011-2018, SBA Office of Advocacy, U.S. Small Business Administration.
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Wealth Sustainability services are not fiduciary in nature, and Ascent serves in a non-fiduciary role when providing these services. Wealth Sustainability services may include strategic wealth coaching services in order to facilitate your self-assessment of wealth sustainability issues. Ascent does not engage in the practice of psychology.