Women are starting businesses at a faster rate than men in Canada, yet many still face barriers when it comes to accessing capital and finding mentors to help them scale their companies. While efforts are increasing to support female-led businesses, more can be done to create equality and opportunities for women entrepreneurs — and to recognize their significant contribution to the broader economy.
We asked successful Canadian female entrepreneurs to share their stories and offer advice on how to support aspiring female business owners get ahead:
Canada is home to 1.4 million women entrepreneurs with businesses that generate $117 billion in economic activity a year. Nearly two-thirds of women entrepreneurs with adequate funding for their companies turn a profit in just two years.1
While the share of women-owned businesses in Canada is growing, it still falls well behind countries including Mexico and Japan.2 Studies also show women entrepreneurs generate 58 per cent less revenue than men.3 What’s more, only 27 per cent of women entrepreneurs have access to a mentor to help support them.4
While the Canadian government and organizations are already working towards creating gender equality in business, “There is still much further to go to achieve parity,” says Stephania Varalli, Co-CEO of Women of Influence. For instance, Varalli cites data showing that women entrepreneurs receive only a tiny slice of venture capital funding.5
And while nearly half (47 per cent) of small-and-medium-sized business in Canada have at least one female owner, Varalli says only 16 per cent are wholly owned by women.6
“It’s tempting to tell women entrepreneurs that, to get financing, they need to have a solid business plan, and present it with confidence to potential investors — which of course they do, but I’d give the same advice to a man,” she says. “It isn’t beneficial to focus only on what women can be doing to help themselves when there are so many other factors outside of their control impacting their success.
Removing Gender Bias
“The commonly held vision of a successful entrepreneur is a man,” Varalli says. “If we don’t do the work to normalize women entrepreneurs — sharing their stories and celebrating their accomplishments, with the understanding that not all women are looking for hockey stick growth or unicorn valuations — they will continue to face challenges. “
While unconscious bias may be an underlying cause, the same may be said of conscious bias. “There are still myths that prevail despite being debunked, such as women entrepreneurs being risk-averse,” Varalli says. “Part of this stems from a lack of visible role models proving the bias wrong, and providing women entrepreneurs with inspiration, a belief that success is possible, and insights to get there.”
To change the mindset, Varalli says there needs to be more focus on ambitious, risk-taking women leading their own businesses. Women also need to seek that attention.
“How would our view on entrepreneurs expand if we shared the stories of women finding flexibility, supporting themselves and their family, and following their passion through entrepreneurship?” she asks. “There is so much to be gained, and nothing to be lost, by supporting women entrepreneurs.”
Women Helping Women
Women are doing their part to help each other start and grow their business. There are numerous organizations where women support women with everything from mentorship to financing.
One example is SheEO, a Toronto-based global non-profit with a crowdfunding-style business model that provides backing to female entrepreneurs. Self-described “serial entrepreneur” Vicki Saunders founded SheEO with the intent to disrupt the existing startup financing models. “To me, if you want to shift the narrative, you have to change the experience,” Saunders told RBC recently.
Built on a model of “radical generosity,” SheEO recruits groups of 500 women who each donate $1,100 to a fund. The fund makes zero-interest loans to five companies founded and run by women ($100 from each donation goes towards running the program). Loans of around $100,000 — in local currency — are paid back in 20 equal installments over five years. The money is then reinvested into the fund and loaned out again to new ventures.
Saunders says women are very capital efficient and excel at paying it forward.
“When women come together, it’s amazing what can happen, especially when you add the buying power element to it,” she says
Catalyst Canada Executive Director Tanya van Biesen says aspiring women entrepreneurs need to see more women in visible and influential positions — as investors and successful entrepreneurs.
“[It] means we all need to work together, men and women across the venture funding ecosystem, to ensure that these women are being identified and selected for these roles,” she says.
Empowering Young Women
In schools, particularly post-secondary education when young women are thinking about career opportunities, van Biesen says women need to be empowered to start and scale their own business. Research shows 60 per cent of university graduates are women, and women are the fastest growing entrepreneurial demographic.7
President and CEO of the Canadian Women’s Foundation Paulette Senior cites research showing girls are equally predisposed to leadership as boys, “But from a young age, girls face obstacles that discourage them from seeing themselves as leaders. These obstacles range from negative media representation, to lack of diverse role models, to the barriers girls see their mothers face.”
Maya Roy, CEO of YWCA Canada, says the primary barriers for women in business are both personal and economic. Some women are sidetracked by incidents of harassment and violence, as evidenced in the experiences brought out in the #MeToo movement. The wage gap — women make 87 cents for every dollar earned by men — is also a real problem.8
“Women and girls don’t just face a glass ceiling, but a glass cliff,” says Roy. “We know that women and girls have amazing skills and lived experiences; what they need is the coaching and seed funding to turn their social capital into actual capital. If we invest in women and girls social entrepreneurship — everyone benefits.”
In November 2018, 23 women were recognized at the 2018 RBC Canadian Women Entrepreneur Awards. These exceptional women, and their trail-blazing companies from a variety of industries, share a common goal — to be the best at what they do.
1. Women of Influence/RBC report
2. The State of Women in Canada’s Economy
3. PayPal Women’s Entrepreneurship study
4. Women of Influence & Amex Canada Report, 2016
5. Fortune.com “Female Founders Got 2% of Venture Capital Dollars in 2017”
6. Women of Influence/RBC report
7. Statistics Canada, Women and Education
8. The Gender Wage Gap and Equal Pay Day, 2018
More from the Canadian Women Entrepreneurs Series:
The 27th Annual RBC Canadian Women Entrepreneur Awards: Celebrating Business Owners Making a Difference
Heather Modlin on the Rewards of Creating a Non-profit Business- Key Assets Newfoundland and Labrador #IMadeThis
Founders of Routine Share How They Turned Their Clean, Natural Products into a Thriving Global Business #IMadeThis
Saccade Analytics: Turning 30 Years of Research into Insight, a Testing Device for More than 200 Neurological Disorders #IMadeThis
SheEO CAN Summit 2019: Celebrating the Women Who Are Influencing Change, Making a Difference, and Leading the Way to a Better World
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.