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Feminine Capital: Unlocking the Power of Women Entrepreneurs
Feminine Capital: Unlocking the Power of Women Entrepreneurs
Feminine Capital: Unlocking the Power of Women Entrepreneurs
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Feminine Capital: Unlocking the Power of Women Entrepreneurs

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Today, there are over 200,000,000 women business owners around the world. Many of these entrepreneurs are not doing business as usual, nor are they simply leaning in. Rather, they are tapping into feminine capital—the unique skills and sensibilities that they have cultivated as women—to create enviable successes.

Drawing on four decades of award-winning research, Feminine Capital reveals how women are harnessing different approaches to doing business. Barbara Orser and Catherine Elliott detail the pillars of feminine capital and offer new insight into the ways that gender can influence entrepreneurial decision-making. They find that leveraging feminine capital can help women to create distinctive brands, build new markets, and drive profits—all while leveling the playing field in business. In doing so, women are changing our social and economic landscape, one venture at a time.

Dispelling myths and misperceptions that can undermine women-owned ventures, this book takes a fresh look at how female entrepreneurs can leverage their skills, knowledge, and values. Case studies of women entrepreneurs bring key concepts and lessons to life, while learning aids, diagnostic tools, and checklists help readers to construct innovative business models, refine start-up plans, and hone growth strategies.

LanguageEnglish
Release dateMar 25, 2015
ISBN9780804794312
Feminine Capital: Unlocking the Power of Women Entrepreneurs

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    Feminine Capital - Barbara Orser

    Stanford University Press

    Stanford, California

    ©2015 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved.

    No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying and recording, or in any information storage or retrieval system without the prior written permission of Stanford University Press.

    Special discounts for bulk quantities of Stanford Business Books are available to corporations, professional associations, and other organizations. For details and discount information, contact the special sales department of Stanford University Press. Tel: (650) 736-1782, Fax: (650) 736-1784

    Printed in the United States of America on acid-free, archival-quality paper

    Library of Congress Cataloging-in-Publication Data

    Orser, Barbara, author.

    Feminine capital : unlocking the power of women entrepreneurs / Barbara Orser and Catherine Elliott.

    pages cm

    Includes bibliographical references and index.

    ISBN 978-0-8047-8378-1 (cloth : alk. paper) — ISBN 978-0-8047-8379-8 (pbk. : alk. paper)

    1. Businesswomen.   2. Women-owned business enterprises.   3. Self-employed women.   4. Entrepreneurship.   I. Elliott, Catherine, 1960– author.   II. Title.

    HD6072.5.O77 2015

    338'.04082—dc23

    2014042781

    ISBN 978-0-8047-9431-2 (electronic)

    Typeset by Bruce Lundquist in 10/15 Minion

    Feminine Capital

    Unlocking the Power of Women Entrepreneurs

    Barbara Orser and Catherine Elliott

    Stanford Business Books

    An Imprint of Stanford University Press

    Stanford, California

    This book is dedicated to the late Gwynneth Joyce Wallace, a friend, community leader, and nurturer of dreams. For everything there is a season.

    To our children, Emily and Hannah Young, Michael and Amanda Grant-Orser, and David Riding, this book demonstrates the power of friendship and perseverance in fulfilling one’s dreams.

    We extend heartfelt thanks to our husbands, Allan Riding and Andrew Young, for their support in the creation of this book. Merci.

    Contents

    Figures, Tables, and Learning Aids

    Acknowledgments

    Feminine Capital

    1. Reframing Entrepreneurship

    2. Intention, Success, and Identity

    3. Getting to Go

    4. Enterprise Growth

    5. Social Capital

    6. Money Matters

    7. Power in Policy

    8. Never Underestimate the Underestimated Woman

    Notes

    Glossary

    Index

    Figures, Tables, and Learning Aids

    Figures

    1.1: Female deficiencies: Theoretical rationales

    2.1: The entrepreneurial identity framework

    3.1: Gendered matrix of venture creation

    4.1: Export thresholds: Association between firm size and export propensity

    4.2: Lessons learned and advice about exporting

    5.1: Framework of social capital

    5.2: Spheres of social capital

    6.1: Framework of financial capital

    7.1: Landscape of women’s entrepreneurship and small-business programs

    Tables

    I.1: Gender and venture creation

    1.1: Early masculine and feminine nomenclatures

    1.2: Theoretical foundations of entrepreneurial feminism

    3.1: Gender dimensions of sector choice

    3.2: Gender perspectives on venture creation

    3.3: Lessons learned from feminist entrepreneurs

    6.1: Tensions in lending relationships

    6.2: Leverage: Debt and equity investment

    7.1: Global indices associated with women’s entrepreneurship

    7.2: Approaches to assessing economic gender discrimination

    7.3: Rationales for female-focused entrepreneurship policies

    7.4: Strategies to make policy change happen

    8.1: Strategies to support women’s entrepreneurship

    Learning Aids

    2.1: Recognizing your feminine capital

    2.2: Building blocks of entrepreneurial success

    2.3: Building blocks of entrepreneurial intention

    3.1: Planned strategy

    3.2: Managing startup ideas

    3.3: Effectuation process versus planned strategy

    4.1: Explanations of enterprise growth

    5.1: Strategies to build trust in relationships

    5.2: Sources and configuration of social capital

    5.3: Learning expectations of mentoring

    5.4: Tips for establishing a peer-to-peer mentoring group

    5.5: Tips for building an advisory board

    5.6: Should I add this association to my social capital portfolio?

    6.1: Benefits and risks of external capital

    6.2: Strategies to increase women entrepreneurs’ access to capital

    7.1: Women-focused entrepreneurship policy

    7.2: Entrepreneurship policy levers

    7.3: Motives for using female-focused entrepreneurship programs

    Acknowledgments

    It is our hope that this book serves to stimulate discussion about the substantive contributions of women entrepreneurs and to illustrate the relevance of gender and entrepreneurship research to business practice, education, training, and public policy. We are indebted in this task to the thousands of entrepreneurs whose experiences are captured in the studies and scenarios profiled throughout the book. Having heard their stories and experiences?—as women, as entrepreneurs, as entrepreneurial feminists—we were motivated to share their insights. There were also many other behind the scene contributors. Each study had a support team, and to our coauthors, research assistants, and librarians we extend our gratitude.

    We also wish to express our special thanks to Sandra Altner (CEO, Women’s Enterprise Centre of Manitoba) and Allan Riding (Deloitte Chair in the Management of Enterprise Growth at the University of Ottawa Telfer School of Management). Three more members of the university project team are deserving of special mention: Cecilia Tellis (librarian, Telfer School of Management) and graphic designers Michael Anstis and Safae McLellan (docUcentre). Editorial assistance was provided by David Horne. A special thank you to Margo Beth Fleming and James Holt of Stanford University Press, and to Patricia Greene and Julie Weeks, who provided timely and constructive feedback on the book proposal and manuscript. With their generous input, we were able to forge ahead with clearer concepts and direction.

    Much of our work has been influenced by scholars in the Diana Group. A note of thanks is also extended to members of the Canadian Taskforce for Women’s Business Growth and numerous women-in-enterprise champions around the world who are working to better support women’s entrepreneurship through public policy.

    We wish to acknowledge those agencies that have financially supported our research, including Atlantic Canada Opportunities Agency, Department of Foreign Affairs, Trade and Development, Embassy of the United States, Industry Canada, Mount St. Vincent University Women’s Enterprise Centre, Social Science and Humanities Research Council of Canada, Status of Women Canada, University of Ottawa Telfer School of Management, U.S. State Department, Western Diversification, Women’s Business Initiative, and Western Diversification Women’s Enterprise Initiative. Thanks are extended to colleagues Dean Francois Julien (University of Ottawa), Dean Micheál J. Kelly (now, Wilfred Laurier University), and Assistant Dean Alain Doucet. Over the past ten years, their support has enabled the completion of several large-scale projects that have helped to formulate our thinking around the concept of Feminine Capital.

    Barbara Orser and Catherine Elliott

    Feminine Capital

    Globally, two hundred million women are engaged in business ownership.¹ Across North America, women retain ownership in half of all small businesses.² In the United States alone, over eight million female-owned firms generate $3 trillion a year in economic impact.³ Women are creating jobs, products, and services, and are investing earnings in their families, firms, and communities. In doing so, they are changing the landscape of venture creation around the world, one venture at a time.

    Despite these encouraging statistics, from our perspective, being female is too often deemed to be an entrepreneurial handicap. When compared to male-owned ventures, female-owned enterprises are judged to be smaller, less successful, and less likely to grow. With women around the globe making progress on their own terms, however, it is time to redefine entrepreneurship and what it means to be successful.

    Traditionally, entrepreneurship is defined as enterprise creation, including actions taken to create for-profit, nonprofit, social, ecological, and sometimes publicly funded ventures. Fear of success, risk adversity, and failure to delegate tend to dominate discussions about the reasons for gender differences in enterprise performance and notions about women’s entrepreneurial identity. These apparent psychological flaws have little value in explaining women’s economic progress. It is time to recognize feminine capital as an asset.

    Feminine capital captures that which is feminine within one’s experience and identity. It is an aggregation of ways of knowing, roles and expectations, values, and behavior that is both individual and collective. These assets have social and economic value. Feminine capital can be developed, just as risk-taking behaviors within venture creation can be learned. This book celebrates the feminine. We do so by describing women’s experiences in the world of venture creation.

    Feminine attributes traditionally are associated with females, behavior that is reinforced through socialization. For this reason, we listened to the experiences of women to better understand the nature of feminine capital. In conversations with, and studies of, thousands of women business owners we learned that entrepreneurs embrace a continuum of perspectives about how gender has an impact on the ways that they do business. For some, they perceive that being female has no influence on their business practice. For others, it’s all about being female. Women are making the conscious decision to not let others’ perceptions about aspirations and behavior limit their commercial success. Underlying the way in which some women do business is a sense of determination and passionate belief in the importance of their enterprises. In certain cases, perceptions about inequality and women’s subordination have triggered entrepreneurial inclinations. A common ambition of many women entrepreneurs is the desire to empower others. Entrepreneurship is seen as a mechanism for creating opportunity, economic self-sufficiency, and equity-based outcomes. These feminist entrepreneurs are change agents who employ entrepreneurship to improve women’s quality of life and well-being. By doing so, they enrich our understanding about contemporary feminism. They are showing us how venture creation can lead to social and economic transformation.

    We conducted other studies that compared the experiences of male and female entrepreneurs. While research tells us that gender is associated with differences in enterprise performance, we found more similarities than differences between groups. Building on these studies and an emerging literature about gender and entrepreneurship, this book explores three questions:

    • What is feminine capital?

    • How is feminine capital transforming entrepreneurship?

    • How does entrepreneurship inform feminism?

    This book takes a fresh look at the intersection between entrepreneurship and feminism, and how female entrepreneurs are infusing new values in business practice. Stories and scenarios are used to explain concepts and theories that are presented throughout the book. Reflections are questions intended to link these ideas with your own perspectives and experiences. Drawing on four decades of research that examines entrepreneurship, the book consolidates the most important lessons learned. These insights will help you as a business owner, student, scholar, or future entrepreneur to challenge dated assumptions and to recognize your own unique talents and skills.

    How This Book Came to Be

    Our first encounter with feminist entrepreneurs came from an unexpected source—the women of Wolfville, Nova Scotia, a small town in Atlantic Canada. It was among these business owners that we recognized the power of feminine capital. Conducting interviews was not initially part of a holiday, but surrounded by the panoramic beauty of the Annapolis Valley, we were introduced to the founder of a community-based theater troupe.⁴ Then we were introduced to six more local entrepreneurs. All had founded business or social enterprises. All spoke about the need for social change. They all told us about their efforts to earn a living while improving the lives of others. These women were calling on their knowledge as caregivers, community champions, artisans, and former employees to develop new products, new markets, new services, and better processes. Some were creating by women, for women enterprises. They saw themselves as feminists, women of Wolfville, and women of the world. Their commitment to equity through enterprise was inspiring.

    Arriving back in Ottawa, we decided that we would seek out more women who share such entrepreneurial perspectives. Surprisingly, it was not difficult. Reaching out to our North American contacts in small-business training agencies, we asked if the directors would forward our request to speak with female entrepreneurs with a double bottom line, one that includes helping other women. The email produced more responses than the study could absorb. Never had so many business owners contacted us to tell their stories. Diamond extractors in Northern Canada, midwestern manufacturers, and west coast retailers described the ripple effects of their enterprises. Motivated by their insights, in this book we draw on the lessons we learned from the many business owners who sought to talk to us, as well as from other findings of our ongoing research program. Collectively, our studies document the experiences of over twenty thousand entrepreneurs.

    One lesson is that for many women, venture creation is not gender neutral.⁵ Yet recognizing feminine capital in the venture creation process is not obvious. Its impacts are subtle. Its magnitude is obscure. At the surface lie visible markers of gender. But gender effects are realized in many ways: in entrepreneurial decisions and assumptions, within identity and perception, and through actions and interaction. Gender is linked to the firm by way of governance and corporate culture, and is reproduced through institutional relationships within financial intermediaries, government, and academe. In other words, gender is embedded within the venture creation and exchange process.

    Organization of This Book

    To position our research findings, the first section of the book (Chapters 1 to 4) introduces the concept of feminine capital. Chapter 1 starts by debunking misperceptions about gender and entrepreneurship. The masculine archetype is exposed.⁶ We then explain how expert thinking contributes to the invisibility of feminine capital. The tenets of neoclassical economics, women in management, and entrepreneurial feminism are presented. Chapter 1 is the most theoretical of the chapters. This information is included at the outset of the book, as we believe that it is useful to understand the conceptual foundations upon which the rest of the book is built. For those readers who seek practical insights only, you may wish to jump directly to Chapter 2. In this chapter, we explore how being female influences entrepreneurial identity, a building block for enterprise creation. We also explore the links among definitions of success, attitudes to business ownership, and entrepreneurial intention. We then introduce the Entrepreneurial Identity Framework—a tool that will help business owners map out how their perceptions of success and intentions reflect their identities as entrepreneurs. Chapter 3 delves into opportunity identification. We describe how women entrepreneurs are capitalizing on their wisdom, know-how, and the Internet to commercialize ideas. Motivated by the desire for change—in themselves, families, and others—women are launching enterprises that align personal values with market opportunities. Pathways to venture creation are explained. Then in Chapter 4, we shift the focus from theory to practice, describing tactics for building enterprises that align with founders’ values and expectations. Innovative business models that fuel sustainability and enterprise growth are illustrated through three in-depth case studies. Many of the approaches that women are using are radically different from traditional, profit-focused pathways. This information can help you to broaden your vision of venture creation and guide decisions such as where you should invest your time, creativity, and capital.

    The second section of the book (Chapters 5 and 6) explores the gendered nature of resourcing enterprises. This section is important, given that many entrepreneurs face limited time and money; an absence of peers and colleagues from whom they can learn; and significant personal, professional, and financial risks.⁷ Chapter 5 deals with relationships, ways of creating value-added networks, advisory teams, mentors, associations, and other forms of social capital. Best practices in mentoring and protégé relationships are shared. Chapter 6 is all about money, including types and uses of financing. Innovative financing strategies and the challenges of achieving financial literacy are also discussed.

    Up to this point in the book, we focus on individual actions, the power within that enables entrepreneurs to create wealth and social change. However, entrepreneurial success is not solely the consequence of one’s intentions. In Chapter 7 we broaden the conversation to include institutional influences on enterprise performance, such as politics, policies, and training programs. Power in policy implies that public policy can be better leveraged to support women’s entrepreneurship. In this chapter we make a call to action, describing why it is important for women business owners to engage in policymaking and ways in which you can influence public policy. This information is important, given that public policy has an impact on multiple aspects of enterprise performance and that few policy frameworks explicitly address issues associated with women’s entrepreneurship. Finally, in the closing chapter (Chapter 8), we summarize the key themes of the book by revisiting feminine capital and entrepreneurial feminism—the foundational concepts advanced in the book—to explain how women’s entrepreneurship is changing the ways we think about wealth.

    Each chapter contains tips, diagnostic tools, and checklists, as well as practical scenarios that illustrate alternative approaches to doing business. We also summarize ideas and highlight related studies in a series of learning aids, figures, and tables. Explaining feminine capital necessitates new perspectives and language about venture creation. To provide clarification of key terms, a glossary is presented at the end of the book. We encourage you to read the glossary and chapter notes, as this book introduces a number of new concepts.

    Before proceeding, take a moment to reflect on your views about being female and entrepreneurship. Think broadly. If you are an entrepreneur, how, if at all, does gender affect the ways you do business? To what extent is the process of venture creation gendered? If you are a student, reflect on how gender is reflected in curricula, including entrepreneurship course content, case studies, and speakers. We encourage you to write down your reflections, as we will revisit this question in Chapter 8. Consider which of the categories in Table I.1 best capture your perspective.

    More Reasons for Writing This Book

    Several more observations played roles in our motivation to write this book. We have heard academic colleagues and policymakers at the highest levels proclaim, There are no gender issues in entrepreneurship. It is as if venture creation remains unadulterated by social, cultural, and historical influences. Whether the statement is echoed behind closed doors, in the classroom, or at a public podium, a substantive body of research does not support this contention. Too often, business owners assume that their own life circumstances and experiences reflect the realities of other entrepreneurs. We have pondered what motivates or gives intellectual license to such a proclamation, particularly within the academic community that is in the business of creating and disseminating evidence-based knowledge. On the topic of women’s entrepreneurship, single-study findings, anecdotes, and personal opinion trump validated studies. This is not without consequence. Such a perspective cuts off discussions of why, for example, there remain persistent gender differences in enterprise performance or why females are significantly less likely to consider venture creation as a career choice.

    Table I.1: Gender and venture creation

    Females constitute over half of North American business students. Many colleges and universities have introduced entrepreneurship courses across faculties. Such courses reflect the reality that many graduates will experience self-employment or business ownership at some point during their careers. Universities also face increasing pressure to commercialize faculty members’ and students’ intellectual property. Yet insights about gender influences in venture creation are essentially absent within entrepreneurship curricula and technology transfer operations. As a result, many faculty and students retain the perception that there are no gender issues. Statistics prove otherwise.

    We anticipate that this book will be of interest to small-business owners who seek to grow their enterprises. Information will also assist academics, industry associations, and sector councils that wish to better understand the professional needs of students and members. The book presents an upbeat and practical view on how entrepreneurship can inform feminist thinking. This last motive reflects an observation that many regard feminism as passé. Others claim, I’m not a feminist, but— Our studies taught us that many women business owners are reclaiming feminism. Feminist entrepreneurs are embracing an action orientation, one that infuses values of equity within the act of venture creation.

    Entrepreneurial decisions must be considered within the broader context of women’s legal and property rights, family responsibilities, culture, and politics. Once you have completed the book, we encourage you to reflect on how the lessons learned resonate with your own circumstances and the extent to which being female influences your entrepreneurial practices. We invite you to share your experiences and perceptions with other entrepreneurs in order to create a collective understanding about the ways in which feminine capital is enacted in venture creation. By doing so, you can contribute to insights that will inform business practices, training, research, and policies to create even more prosperous ventures and social change.

    1

    Reframing Entrepreneurship

    To begin our exploration of how feminine capital influences the venture creation process, we open by introducing five women who are among those whose stories we will follow during the course of this book. Three have founded operating enterprises, of which two are intrapreneurs, entrepreneurs who are responsible for creating innovative services and products within institutional settings. Two more of the entrepreneurial heroines are fictitious, composites that embody the experiences of the women whom we interviewed through the course of our research. Each of the five stories reflects a unique perspective about the venture creation process. After becoming acquainted with these entrepreneurial heroines, we step back in time to expose early stereotypes about female entrepreneurship. We do this because a historical perspective helps to illuminate antiquated assumptions about what it means to be entrepreneurial. Stereotypes continue to influence entrepreneurial intentions, sometimes pushing business owners to act in prototypically masculine ways.¹ In addition, stereotypes help to explain why some female entrepreneurs, even those who are experienced and well educated, are less likely to believe that they possess the skills and knowledge needed to become an entrepreneur.² Finally, we present summary tables to frame how we think about entrepreneurship. These tools will help you to reflect on the roles that feminine capital and feminism play in the venture creation process.

    The Nature of Feminine Capital

    Susan Ross

    Susan is a stay-at-home mother who is thinking of starting a professional services business. At the same time, she is weighing the pros and cons of returning to corporate employment. Prior to leaving the workforce, she was employed as the product manager in a global consumer packaged goods company. Susan’s decision is one that many women face. Should I continue working in the home? Should I start a business? Should I return to paid employment? The decision is not easy. Susan may be aware that most women who leave the labor force for family responsibilities rarely catch up to the earning capacity of colleagues who stay. This leads her to favor venture creation. But business ownership rarely offers health or other benefits coverage. There are more trade-offs to consider. Many new enterprises do not survive the first few years. Given the discontinuance rates of startups, lower self-employment wages, and often lack of pensions and other benefits, Susan must think about the opportunity costs of venture creation. These include forfeited wages, professional reputation, and time and capital invested, not to mention the stress associated with potential business failure. Susan is also aware of the advantages: the satisfaction of creating a new venture, autonomy, the opportunity to employ others, and the possibility of earning more than salaried colleagues.

    Asha Sing

    Asha is the president of a mid-sized, international wholesale operation for shoes. The firm has a proven track record of performance. She is seeking growth opportunities. During a recent customer visit, Asha noticed that the buyer referred all questions to her male vice-president. Having realized this (after several attempts to engage him in conversation), she stepped back to let the two men speak. In reflecting on this incident, Asha realizes that this customer simply does not wish to do business with a female president. On a personal level, she has no time to worry about what she refers to as knuckle-draggers, those who treat female business owners as subordinates. At the professional level, she must determine how best to respond to such a client.

    Maria Guidi

    Maria owns a small construction firm with a growing list of local clients. She likes the idea of keeping her business small. A representative from WEConnect International—a nonprofit advocacy organization that promotes supplier diversity initiatives—has suggested that she apply for certification as a majority female-owned firm. Certification may facilitate business with global corporations. She has mixed feelings, however, about this opportunity. She is concerned that the firm may not have the capacity to meet international standards and fulfill the obligations of a large contract. At the same

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