One in three Americans owns a business. In the first five years of entrepreneurship, women-owned businesses generate 10% more revenue than male-owned businesses, yet only three out of ten business owners are women. Why is that?
Research published in Harvard Business Review indicates that the majority of investors are white men, which may contribute to pattern-based decision-making that favors familiar profiles. Women entrepreneurs, on average, receive $1 million less in investment capital, despite generating significantly higher revenue per dollar invested earning 78 cents on every dollar compared to just 31 cents for male-run startups. Increasing female representation in the boardroom by just 10% is associated with a 1.5% improvement in average returns, which can translate into up to 10% more cumulative revenue over the first five years.
Motivations also differ by gender. Many women report a stronger focus on creating positive social and community impact and often do not see those priorities reflected in traditional corporate environments. As a result, they build organizations that align with their values. Entrepreneurship can offer women greater flexibility and work-life integration, which supports long-term engagement and performance. Women-owned businesses tend to attract more diverse talent and report higher employee satisfaction. Greater workforce diversity broadens the range of ideas and problem-solving approaches, which in turn can drive innovation and help these organizations outperform less diverse peers.
Despite these strengths, there are still substantial structural barriers for women-owned businesses. Only 8% of investors are women, and female entrepreneurs frequently face challenges in navigating early-stage business processes due to limited access to mentorship, networks, and institutional support. Addressing these gaps starts with increasing female representation in investment decision-making roles, building intentional peer and mentor support communities for women founders, and evaluating pitches on objective criteria rather than assumptions about technical or operational capability based on gender.
If the number of women-owned businesses matched that of male-owned businesses, estimates suggest the U.S. economy could gain between $2.5 and $5 trillion in additional output. In an environment characterized by financial volatility and inflationary pressure, supporting the growth and stability of women-owned enterprises is not just an equity imperative, it is a strategic economic opportunity.