Report Studies Impact of Gender in High-Tech Startups

Women launch high-tech firms with less financial capital than men according to the latest report from the Ewing Marion Kauffman Foundation.  As part of an ongoing study, Kauffman released the fifth in its series of Kauffman Firm Survey research reports which follow the continuing development of 5,000 high-tech companies launched in 2004. 

The latest study, Sources of Financing for New Technology Firms: A Comparison by Gender finds a number of trends within female-owned high tech startups including:

•    Women-owned high-tech firms are more likely to be sole proprietorships or partnerships than LLCs or corporations.
•    They are more likely to be home-based businesses.
•    From startup through fourth year, these firms made progress in raising substantial amounts of capital and in developing intellectual property.

When it came to financing though, women launch with less financial capital than their male counterparts and they tend to follow a different financial strategy over time.  Over their first four years of operation, women seemed either unwilling or unable to develop external sources of equity which has significant implications for their ability to introduce new products and services, expand into new territories and hire employees. 

The study suggests that even at startup men envisioned larger more complex firms than women and years after startup, women-owned high-tech firms continue to lag behind men-owned firms in performance metrics such as revenues, profits assets and employment.

 For more details, see the report from The Kauffman Foundation.