What if there was a way to increase the number of supernovas? I’m not talking about stars in the sky but economic stars -- companies that explode into prominence and contribute significantly to the number of jobs created, innovation, and global prosperity. Not just more Googles in the technology sector, but companies in the life-science sector, such as NVision Medical, which is developing products related to infertility and ovarian cancer, and in the consumer sector, companies such as LearnVest, which is a personal finance and lifestyle website.
Perhaps you haven’t heard of NVision and LearnVest, but Astia-- a nonprofit that identifies and propels high-potential women-led companies with expertise and money -- helps these companies reach their full potential. That may include becoming a household name. Astia estimates there could be 10,000 more supernovas in the world by 2020 if high-potential, women-led companies received recognition, support and investment.
These companies would most likely have been ignored 10 or 20 years ago because angel investors and venture capitalists -- virtually all men at the time -- would not have understood the business models of these companies. Definitions of success then and pretty much now were created by venture capitalists.
This point of view limits our thinking to certain types of companies, such as high tech, said Teresa Nelson, Ph.D., Astia Global Advisory Board, Astia Executive in Residence 2013-14, and Chair in Entrepreneurship at Simmons College. Lots of non-tech companies scale. In her research, Nelson found that only half of all companies that do an IPO are venture-funded.
Among 2014 Women Presidents’ Organization 50 Fastest Growing Women-Owned/Led Companies, only 2% of these supernovas started with venture capital funds. These companies averaged nearly $100 million in revenue in 2013, and their projected average number of employees for 2014 is 699.
- 58% started with their own funds
- 26% started with funds from friends and family
- 4% started with a bank loan
- 8% started with a line of credit
- 4% started with a credit card
- 4% started with private investors/angels
- 2% started with venture capital funds
High-growth, women-owned businesses start with less than half as much money as their male counterparts, according to Access to Capital by High Growth Women-Owned Businesses, conducted on behalf of the National Women’s Business Council (NWBC). The difference was even more acute among companies raising equity financing — these companies aspire to be huge. Women received 2% of total funding from outside equity compared to 18% for men. Imagine how many more supernovas there would be, how much bigger these companies would be, and how much faster they would grow if they received equal funding to other companies!
Want more supernova companies. Read Astia's white paper on the movement they are creating.
Editor’s Note: This is the first of a 2-part series on Astia.
