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Give me examples of effective indicators to track participation of women in entrepreneurship
Crunchbase, the Global Entrepreneurship Monitor (GEM), and Mastercard have all provided indicators of women's participation in entrepreneurship. The fact that these three organizations have been publishing these indicators for several years already attest to the usefulness of these indicators. Examples of these indicators include the following: % of startups with at least one female founder, % of rounds raised by female-founded startups, % of dollars raised by female-founded startups, total early-stage entrepreneurial activity (TEA) rate, and female entrepreneurial activity as a % of male entrepreneurial activity.
CRUNCHBASE
Crunchbase has released several reports since it began studying female startup founders in 2015. Its comprehensive database of startup information makes it well-equipped to analyze women-led startups. Below are the most prominent indicators in Crunchbase's studies.
1. % of startups with at least one female founder
This indicator is used by Crunchbase in its ongoing study of female founders. So far, the study includes 43,008 global companies that have founders and that have received initial funding anytime between 2009 and the first quarter of 2017. Of these 43,008 companies, only 15.8% or 6,791 have a minimum of one female founder. The percentage of companies with at least one female founder has remained flat at 17% since 2012. Between 2009 and 2012, the percentage had increased by almost 8%.
Based on 2009-2014 data, cities in the United States that have the highest percentage of female-founded venture-backed companies include Las Vegas (26%), Oakland (25%), Pittsburgh (24%), Portland (23%), and New York City (21%).
2. % of rounds raised by female-founded companies
Crunchbase found that, in 2016, 19% of seed rounds, 14% of early-stage venture rounds, and 8% of late-stage venture rounds were raised by companies with at least one female founder.
If 2010-2015 data are considered, 12% of venture rounds were raised by companies with at least one female founder.
3. % of invested amounts raised by female-founded companies
According to Crunchbase, in 2016, 17% of seed dollars, 13% of early-stage dollars, and 7% of late-stage dollars were raised by companies with at least one female founder.
If 2010-2015 data are considered, 10% of venture dollars were raised by companies with at least one female founder.
4. % of investing partners at venture capital/ corporate venture/ accelerator firms that are female
In 2016, Crunchbase reported that, of the 755 partners at the top 100 venture capital firms worldwide, only 54 or 7% were women.
5. % of top 100 venture capital/ corporate venture/ accelerator firms that have a minimum of one female partner
Based on Crunchbase's study, of the top 100 venture capital firms globally, 38% have at least one female partner.
6. Growth of female-founded venture capital firms
As reported by Crunchbase, women founded 16% of venture firms launched in the past three years and 12% of venture firms launched in the past five years.
GLOBAL ENTREPRENEURSHIP MONITOR (GEM)
Started in 1999, the GEM is "the world's foremost study of entrepreneurship." Its methodology is proven to be reliable and is trusted by international organizations such as the United Nations, the World Economic Forum, the World Bank, and the Organization for Economic Cooperation and Development (OECD). Babson College of the United States and London Business School of the United Kingdom collaborate on this project. The GEM uses several indicators, but its indicators of women's entrepreneurship are as follows:
1. Total Early-Stage Entrepreneurial Activity (TEA) rate
Based on the GEM's 2016 United States Report, the TEA rate of women in the United States in 2016 was 10%, five percentage points lower compared to men's. The TEA rate is defined as "the prevalence rate of individuals in the working age population who are actively involved in business start-ups, either in the phase of starting a new firm (nascent entrepreneurs), or in the phase spanning 42 months after the birth of the firm (owner-manager of new firms)."
2. Attitude measures: perceived opportunities, perceived capabilities, fear of failure, entrepreneurial intentions
The GEM found that, in 2016, women in the United States are lagging behind men in terms of opportunity perceptions (54% vs. 61%), capability perceptions (48% vs. 62%), and entrepreneurial intentions (11% vs. 13%). It found as well that fear of failure is greater among women than among men (36% vs. 31%).
Opportunities refer to the "potential to create economic value through something new or innovative," while capabilities refer to the "belief that one is prepared and has what it takes to start a business." Entrepreneurial intentions, on the other hand, refer to the intention "to start a new business."
3. Industry breakdown of TEA
The GEM reported that, in 2016, the early-stage entrepreneurial activity of women in the United States breaks down into the following industries: wholesale/retail (26%), health, education, government, and social services (21%), professional and administrative services (17%), agriculture and mining (10%), manufacturing and transportation (10%), personal or consumer services (4%), finance or real estate (4%), and information or communication technology (3%).
4. Rate of innovative activity
The GEM found that, in 2016, innovation activity was more prevalent among women than among men (40% vs. 35%). That is, in that year, innovation as a percentage of entrepreneurial activity was higher among women than among men.
5. Rate of profitability
According to the GEM, the rate of profitability was higher among men than among women (91% vs. 75%) in 2016.
MASTERCARD INDEX OF WOMEN ENTREPRENEURS (MIWE)
Although its 2017 MIWE report is an inaugural report, Mastercard has been tracking women's advancement for over a decade now through its Mastercard Index on Women's Advancement (MIWA). The MIWE uses numerous indicators to assess how economies fare in terms of female entrepreneurship. Among the indicators are the following:
1. Women business owners as a percentage of all business owners
2. Women business leaders as a percentage of all business leaders
3. Female TEA as a percentage of male TEA
Based on 2009-2015 data from the GEM, female entrepreneurial activity as a percentage of male entrepreneurial activity in the United States was 62.7%.
CONCLUSION
Indicators of women's participation in entrepreneurship include the following, to name a few: % of startups with at least one female founder, % of rounds raised by female-founded startups, % of dollars raised by female-founded startups, total early-stage entrepreneurial activity (TEA) rate, and female entrepreneurial activity as a % of male entrepreneurial activity. These indicators, along with the rest mentioned in the reports of Crunchbase, the GEM, and Mastercard, are effective in the sense that they figure in yearly reports of trusted resources on women's entrepreneurship.