The Nasdaq Entrepreneurial Center, a non-profit committed to growing inclusion and access for entrepreneurs worldwide, in partnership with Fair Pay Workplace, Penn State’s Evidence to Impact Collaborative, with support from the Wells Fargo Foundation, announced findings from a study looking at pay ownership and valuation issues affecting women entrepreneurs.
The study included a series of focus groups with emerging women entrepreneurs to inform a quantitative survey of 150 early-stage women entrepreneur respondents. The clear theme that emerged from the study was that many of the top obstacles for early-stage women entrepreneurs relate to merging their personal lives and business lives – health care, child-care, personal debt versus business debt and getting access to business information. In service to the study’s findings, a fair wage toolkit is available at https://thecenter.nasdaq.org/pov/ to help small business owners take steps to paying themselves a fair wage.
Key findings:
55 percent of the early-stage women entrepreneurs surveyed do not pay themselves for work they do for their company
The top three reasons women entrepreneurs don’t seek additional funding are as follows:
- Don’t want to accrue debt (23 percent)
- Don’t think they’d be approved by a lender
- Decided to wait until their company hit a milestone to be in a stronger position to raise funds
Access to capital is the #1 barrier negatively impacting the profitability
#2 is declining sales, #3 is the unpredictability of business conditions.
- 59 percent of women entrepreneur respondents said their income varies from month to month. 53 percent said they’re spending equal to or more than their income
One third (34 percent) of women entrepreneur respondents do not have a three-month emergency fund for their expenses
- Women entrepreneurs are twice as likely to have faced food insecurity
- 21 percent of women entrepreneurs said they’ve faced food insecurity versus 10.5 percent in the US according to the USDA
Eight years into a business is a key turning point
- Women entrepreneurs were more likely to pay themselves if their companies were eight years or older
- Women entrepreneurs were more likely to pay themselves if their companies had seed, and/or series A, B or C funding
The best way to close the pay gap is to have more women-led businesses
- More female-led businesses means they’ll compensate their employees fairly
- Women, particularly women entrepreneurs of color, are leading the way in fair pay best practices
“This study shows us that women entrepreneurs have high levels of knowledge about fair pay, but that the actual practice is not within reach due to challenges in funding and access to quality information,” said Nicola Corzine, Executive Director of the Nasdaq Entrepreneurial Center. “It is clear that once we remove pervasive barriers, women entrepreneurs will organically become change agents for fair pay.”
“This work around women entrepreneurs is so important, and not just because women entrepreneurs will bring innovation and economic impact, but because they will make our communities stronger and help lead the way for pay equity for the next generation,” said Jenny Flores, Head of Small Business Growth Philanthropy at Wells Fargo.
About Nasdaq Entrepreneurial Center
The Nasdaq Entrepreneurial Center is a non-profit committed to growing inclusion and access for entrepreneurs worldwide. The Center meets the real-time needs of entrepreneurs through educational programming and then shares its learnings with policy leaders, capital allocators and academic institutions. Established with the support of the Nasdaq Educational Foundation, the Center has been a resource for more than 50,000 entrepreneurs since its inception in 2014, a majority of whom come from underrepresented audiences. For more information please visit: http://thecenter.nasdaq.org/.
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