By Alison Gutterman, Forbes
As challenging as it can be for modern businesswomen to snag capital, they have a serious head start when compared to female entrepreneurs of past generations. Congress didn’t pass the Women’s Business Ownership Act until the late 1980s to help eliminate gender discrimination in lending. Before that point, female entrepreneurs could not even get a loan unless a man co-signed it. Even raising private funding was nearly impossible for corporate-minded women with vision.
Since removing some of the barriers to female entrepreneurship, society has enjoyed the fruits of many women-founded companies. Despite this progress, women still lag behind when it comes to wooing investors. Their historical mistreatment, especially from financial institutions, may partially contribute to this ongoing — and frustrating — problem.
Read more here.
By Falon Fatemi, Forbes
The data is all too real and familiar. When it comes to raising capital, males consistently outperform females. According to research by All Raise, only 15% of venture capital funding is allocated to female founders. What’s more troubling, despite a lot of concern and advocacy, we really haven’t done much to address the discrepancy. All Raise’s research confirms that the growth rate of funding injected into female-founded companies has plateaued over the last few years.
The disproportionate level of funding channeled into male-led startups might suggest that these are more lucrative investments. This couldn’t be farther from the truth. The investment landscape is laden with perceived biases that put an iron ceiling on women’s ability to raise money. One 2018 study found that, during investment pitches, female entrepreneurs are more likely to be asked “prevention” questions—questions related to safety and potential risks and losses. In contrast, male entrepreneurs are more likely to be asked “promotion” questions—questions related to their hopes, ambitions, and achievements. This difference in the modus operandi has a measurable impact on the relative funding each gender receives.
Read more here.
By Monique Greenwood, Entrepreneur
Most women under the age of, say, 45 dread a particular time of the month. (Fellas, stay with me.) So, Arion Long, an African American millennial out of the Washington, D.C., area, came up with the Femly Box, a way to make the monthly menstrual routine less burdensome and more like a gift. Her ultimate PMS kit includes a supply of organic, all-cotton feminine products, along with wholesome wellness treats, like shea butter, herbal tea, and organic chocolates. For about $30 a month, it comes in a pretty package that gets delivered right to a woman’s door, just in time for her cycle.
When Long, a former health plan communications specialist, launched her business in 2015, she had only one problem: getting funding from investors. “Let’s face it,” she says. “I was talking to middle-aged white men. They didn’t know the product or use the product. And they didn’t care. I’m a brown-faced, five-foot-one-inch young woman, who wasn’t taken seriously. I had done my research and was ready. But young white men — some of whom had simply jotted down an idea on a beverage napkin — got the nod.” Long was hoping to snag a modest $10,000 to $75,000 investment. Everyone she talked to said no.
Read more here.
By Geri Stengel, ForbesWomen
Between 1972 — the first year the Census Bureau began tracking the gender of business owners — and 2018, women-owned businesses have grown from representing 5% of all business to 40%, according to American Express 2018 State of Women-Owned Businesses (SWOB)*. However, their economic clout has not grown equally. In 2018, women-owned businesses represented 8% of total employment and 4% of total revenues.
New York City is taking action. Timed for Women’s History Month, the city announced a series of initiatives to address persistent gaps in funding and business development opportunities.
Read more here.
By Geri Stengel, ForbesWomen
Women are increasingly striking out on their own and finding success as entrepreneurs. Between 2007 and 2018, the growth rate of women-owned businesses generating revenues of more than $1 million outpaced the rate of businesses in general: 46% compared to 12% respectively, according to American Express 2018 State of Women-Owned Businesses*. Wealth management companies, take note: women entrepreneurs are taking control of their wealth portfolios, and the old habit of ignoring them has got to go.
Read more here.
Last month, I joined up with Cass Bailey of Slice Communications for a webinar titled You Had a Matchmaker. Now What? A matchmaker is a one-on-one meeting between a certified women’s business enterprise (WBE) and corporate representative at a national WBENC event or a regional event from one of WBENC’s Regional Partner Organizations (RPO). It’s exciting to get a matchmaker because the corporate representative, a potential buyer, has reviewed your profile and chosen to meet with you because they are actively looking for your product or service. What Cass and I found is that many WBEs looked at the matchmaker as the end of their sales journey with a particular corporate target. In reality, a matchmaker is just the beginning. In our webinar, we discussed how to get a matchmaker, preparing for the meeting, and, importantly, how to follow up. Cass presented some marketing tips which are valuable at all of these stages and participants walked away with some concrete steps they could take. You can check out the webinar by clicking the video above.
For certified women’s business enterprises who haven’t had a matchmaker yet or women-owned businesses who are not certified but want to know more, I wanted to provide a brief overview of the process, where you can expect to have a matchmaker, and how to approach the meeting. As we discuss in the webinar, the most important tip you can take is that having a matchmaker, even a fabulously successful one, is just the beginning.
What is this WBENC certification business? How do I become a WBE?
WBENC Certification is simply the process that determines whether or not a company is owned, managed, and controlled by one or more women. Women-owned businesses certified through this process become certified women’s business enterprises (WBEs). Other entities provide certifications for other diverse suppliers – minority-owned businesses, LGBT-owned businesses, or businesses owned by a person with a disability. If you are a member of any of these groups and own 51% or more of your company, there are corporations who want to do business with you. You can read more here and here and download my free guide to which certification is right for you on my website.
How do I get a matchmaker? Most of my advice can be narrowed down to three themes: Show Up, Follow Up, and Scale Up. You get a matchmaker meeting by registering, or showing up, for the events where they host matchmaker meetings. If you’re a certified women’s business enterprise, this might be at your regional partner organization’s programs, another regional partner organization’s programs, or at a WBENC national event such as the Summit and Salute or the WBENC National Conference. You will have to register by a certain deadline and may have to fill out additional profile information. As part of the certification process, you will fill out an application that becomes your first marketing piece for many of these opportunities. Make sure it’s complete!
Read more here.
Fifth annual report reveals City received fourth consecutive “D+” grade overall,”F” grade among African American owned businesses
City contracted just five percent of $19.3 billion budget with M/WBEs in Fiscal Year 2018
Lack of progress highlights need for City Charter mandated Chief Diversity Officer in City Hall and at each City agency
(New York, NY) — New York City Comptroller Scott M. Stringer today revealed that New York City is still lagging behind on spending with minority and women-owned business enterprises (M/WBEs) and renewed his call for a Chief Diversity Officer in each City agency and in City Hall. The fifth annual “Making the Grade” report, which evaluates each City agency’s spending with M/WBEs, showed that while overall spending with diverse firms increased in Fiscal Year 2018, 80% of certified M/WBEs are still not receiving any business from the City. The City received its fourth-consecutive “D+” grade by awarding $1 billion in contracts to M/WBEs out of a $19.3 billion budget in FY18 – just 5.5 percent of the total budget.
Comptroller Stringer has been issuing Making the Grade since 2014 in an effort to drive the City to improve its spending with diverse firms, and hold agencies accountable when they fail to do so. This year’s report highlights the City’s failure to meet spending goals with firms owned by women, Hispanic-Americans and Asian-Americans, but sounds the loudest alarm on the City’s spending with Black-owned firms. Despite an overall “D+” grade, the City earned an “F” for spending with Black-owned firms. Meanwhile, spending with Asian-American firms earned the City a “C”, with Hispanic-Americans a “D”, and with Women-owned firms a “D.”
“New York City is one of the most diverse cities in the world, and yet our own government fails to make fairness and equality a priority when it comes to spending city dollars. There needs to be someone in every city agency making sure minority and women-owned businesses are being given a fair shot to get a piece of a $19 billion budget – that’s why the City Charter has to be changed to include a Chief Diversity Officer,” said Comptroller Stringer. “If we are going to build a five borough economy, we cannot perpetuate a system that fails to build wealth in communities that have historically been left behind. While progress is happening, this report shows just how far we have to go.”
Despite the City’s overall “D+” grade, several agencies made progress over the last fiscal year.
Grades increased at 9 agencies, decreased at 5 agencies, and stayed the same at 17 agencies – meaning almost 30 percent of agencies increased their grade.
Three agencies received an “A” grade – Department for the Aging, Commission on Human Rights, and Department of Health and mental Hygiene.
However, ten agencies that received either a “D” or “F” grade account for 50 percent of the City’s total M/WBE spending, depressing the citywide grade despite areas of improvement.
Stringer’s report advances four proposals to level the playing field for M/WBEs and ensure the City’s multi-billion dollar procurement budget is lifting up all New Yorkers.
A charter mandated Chief Diversity Officer. Accountability begins at the top – and that’s why Comptroller Stringer is calling for a City Charter change to mandate the hiring of a Chief Diversity Officer (CDO) in the Mayor’s cabinet and in every city agency. According to public data, out of 32 mayoral agencies, only seven currently have a CDO, with only four reporting to the Commissioner. But every agency needs a dedicated, executive-level leader to focus on diversity and drive results. The current City Charter Revision Commission provides a unique opportunity to enshrine a CDO in the City’s governing document.
Create competitive opportunities for M/WBEs on citywide requirements contracts. A major obstacle to increasing M/WBE spending is the Citywide requirements contracts that represent approximately 10 percent of the City’s total budget. These contracts are agreements that agencies enter with a limited number of vendors to meet the City’s demand for particular goods or services on an “as-needed” basis, often over multiple years. Examples of items and services purchased through requirement contracts are automobiles, fuel, equipment maintenance, cleaning services, large scale printing of election documents, and more. The City spent more than $1.5 billion through requirement contracts in FY18, but M/WBEs received only $102.5 million – less than seven percent – of this spending. The City should increase opportunities for M/WBEs by awarding requirements contracts to a pool of vendors, rather than one vendor alone, and by striving to include M/WBE subcontracting goals in all requirements contracts.
The City should require prime vendors to disclose details about their commitment to diversity, including their own supplier diversity plans. In FY18, the City’s top 25 vendors received $2.7 billion from the City, but only 3.8% of those dollars made it to M/WBEs. To encourage more M/WBE opportunities among top vendors, the City should require vendors to share details of their own supplier diversity programs when they bid on City contracts. Agencies should be allowed to award points to prospective vendors with robust M/WBE programs and Chief Diversity Officers.
The City Charter should be amended to alleviate the financial burden of contract delays for M/WBE vendors by assigning deadlines to every agency in the contract review process. In FY18, one in four M/WBEs had to work for at least three months without a contract in place or wait just as long after their contract start date to begin work. Meanwhile, over 69 percent of contracts awarded to certified M/WBE vendors were submitted to the Comptroller’s Office for registration after the contract date. Without a registered contract, a vendor cannot get paid – that’s interrupted cashflow. In order to make the process more efficient, transparent, and sustainable for all firms, the Charter Revision Commission should include specific timeframes for each oversight agency in the procurement process.
“In a City that prides itself on opportunity, women and people of color in business continue to be sidelined and neglected, ” said Public Advocate Letitia James. “In a City that thrives on diversity and inclusion, it’s our duty to ensure that M/WBEs are given the opportunities they need to survive. I commend Comptroller Scott Stringer for his continued efforts to highlight and correct this important issue.”
To read the full report, click here.
By The City of New York and MGT Consulting Group
The City of New York contracted MGT Consulting Group (MGT) to conduct a Minority and Women-owned Business Enterprise (M/WBE) Disparity Study (“Disparity Study”). The objective of this Disparity Study was to conduct a disparity analysis of the utilization of M/WBEs in New York City procurement activity, compared to the availability of M/WBEs in the relevant market area.
The Disparity Study’s findings are presented in detail in the full report and supporting appendices. This executive summary summarizes the evidence on the overarching research question:
Is there factual predicate evidence for the continuation of the City’s M/WBE program?
MGT found sufficient evidence of disparity and recommends that the City continue its M/WBE program to address identified disparities. The following sections summarize the approach, findings, and recommendations stemming from the effort.
2. STUDY OVERVIEW
FRAMEWORK AND APPROACH
State and local governments may create affirmative action programs to guide their purchases of goods and services “…where there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality or the locality’s prime contractors.” See Richmond v. J.A. Croson Co., 488 U.S. 509 (1989) (“Croson”). Croson further states that the appropriate remedy for such an inference is likely not a “rigid numerical quota,” id. at 508, but could be a program that offers “some form of narrowly tailored racial preference,” id. at 509. This study has been designed and executed to assess whether such statistical disparities exist in the City’s procurement activities, and successively, to recommend appropriate actions to remedy any observed disparities.
To ensure conformity of findings to the “narrowly tailored” standard prescribed by Croson and successive precedent, the approach and analysis was bound by specific parameters to ensure its relevance to City contracting activity.
- The period over which the City’s procurement of goods and services was analyzed extended from July 1, 2006 through June 30, 2015.
- The study examined the following procurement categories:
- Architecture & Engineering
- Professional Services
- Standardized Services
- Goods or Commodities
MGT, in collaboration with the City engaged in the following outreach efforts: reached over 100,000 businesses and business groups by e-mail or phone, and engaged the business community through community meetings held in each of the five boroughs, and the Disparity Study website. The comprehensive outreach campaign also included digital and print ads in various ethnic media sources, radio ads, postings on social media, as well as printed materials distributed at public events. Outreach was conducted in Spanish, Chinese, Korean, and Haitian Creole, as well as English. As a result of these efforts, over 5,000 business owners and representatives provided direct input into the study’s research and findings, through surveys, interviews, focus groups, and testimonies. Of those, about 60 percent of the respondents were M/WBEs.
It was of importance to the City and to MGT to maximize engagement with the business community and stakeholder organizations, and provide opportunities to comment on their experiences with the current M/WBE program. Activities included:
- Community meetings in each of the City boroughs;
- In-depth interviews and surveys with business owners representing business categories procured by the City
- Focus groups for business owners representing business categories procured by the City, to share experiences and perceptions
- Meetings and interviews with program stakeholders
- Online and social media communication
- Printed, digital, and radio
3. KEY FINDINGS
The current default certification area, encompassing 13 counties spanning between New York and New Jersey, met the 75 percent standard of awards and was therefore identified as the study’s relevant market area.1 MGT analyzed both utilization (dollars awarded by M/WBE classification and procurement category) and availability (proportions of firms by M/WBE classification and procurement category) within this market area.
Table ES-1 shows availability estimates, which are the proportions of firms by M/WBE classification and procurement category deemed willing and able to provide goods or services to the City of New York that are located within the relevant market area.
AVAILABILITY ANALYSIS SUMMARY
Procurement Category – African American – Asian American – Hispanic American – Native American – WBEs – M/WBEs*
Architecture & Engineering 7.54% 7.33% 11.74% 0.32% 35.17% 51.84%
Construction 12.00% 11.10% 17.95% 0.56% 25.66% 54.80%
Professional Services 12.15% 9.56% 8.78% 0.68% 36.78% 53.55%
Standardized Services 14.32% 9.88% 10.20% 0.03% 29.26% 50.33%
Goods or Commodities 5.94% 10.59% 7.07% 2.44% 30.51% 44.71%
*Availability shown for all M/WBEs does not equal the sum of the individual categories because the WBEs category is comprised of all women-owned firms, regardless of race or ethnicity.
MGT found disparities between utilization and availability of M/WBEs during the Disparity Study period. The disparity indices were substantial2 and statistically significant3 in all procurement categories and M/WBE classifications, except for Native Americans in Standardized Services4.
1 MGT uses the “75 percent rule” to determine the relevant market area. This rule is generally accepted in antitrust cases. In another relevant case, James C. Jones v. New York County Human Resources Administration, 528 F.2d 696 (F.2d Cir. 1976), the court accepted less than 100 percent of the data when it was reasonable to assume that the missing data would not significantly change the results of the analysis.
2 A “substantial” disparity is an index value of 80 or below, which is a benchmark that has been recognized by the U.S. Supreme Court as a standard in the determination of employment discrimination (see Connecticut v. Teal (Teal), 457 U.S. 440 (1982)) and has been referenced in federal guidelines for conducting disparity studies (see National Cooperative Highway Research Program Report 644: Guidelines for Conducting a Disparity and Availability Study for the Federal DBE Program, p. 49 (2010))
3 Statistical significance was conducted at a 95 percent confidence interval, which confirms that there is a five percent chance or less that the observed differences between availability and utilization were a result of random chance.
ANECDOTAL EVIDENCE OF DISCRIMINATION
MGT gathered perceptions, experiences, and proposed suggestions to enhance the contracting experience from the business community, particularly among M/WBE firms. The examination of anecdotal evidence reveals the barriers that M/WBEs faced in participating in City procurements, including procurement process issues, certification challenges, financial obstacles, prime contractors’ behavior, competition against larger firms and other barriers. These findings provide anecdotal corroboration and illustration for the statistical evidence of disparities found by the Disparity Study.
DISPARITIES IN THE PRIVATE SECTOR
Analysis of the private sector demonstrates disparities that exist for M/WBE firms operating in the private sector within the City’s market area.
Specific findings from the research include:
- Findings from the U.S Census 2012 Survey of Business Owners (SBO) data indicate that there are substantial disparities for M/WBE firms across different business
- Findings from the 2015 Public Use Microdata Samples (PUMS) data indicate that:
- M/WBE firms were significantly less likely than nonminority males to be self-employed.
- If they were self-employed, M/WBE firms earned significantly less in 2015 than did self- employed non-minority
This evidence stands alongside the disparities observed in public sector contracting to illustrate the substantial inequities that continue to exist in the City’s marketplace.
4. KEY RECOMMENDATIONS
The following recommendations are based on the synthesis of MGT’s findings and do not necessarily tie to one specific finding. In developing the Disparity Study`s recommendations MGT focused on addressing policies that will strengthen the City’s efforts to increase utilization of M/WBEs in its procurement. These are presented in detail in Chapter 6 , Findings and Recommendations within the full report.
RECOMMENDATION A: PROGRAM CONTINUATION
This Disparity Study’s findings support the continuation of the City’s M/WBE program within the relevant market area. Based on the statistical analyses undertaken in the Disparity Study, there is a quantitatively significant disparity between utilization of M/WBEs and their availability in the marketplace. The findings presented in the anecdotal analysis provide additional corroboration of the barriers that M/WBEs face in participating in the City’s procurement process. Furthermore, the evidence from the private sector analysis illustrates the substantial inequities that exist in the City’s marketplace, underscoring its compelling interest in continuing to pursue remedies to address these extant gaps.
4 This was the instance where the population is too small to determine statistical significance. However, the Disparity Index value of 1.88 is so low that the statistical significance is less essential to the confirmation of the gap that exists between utilization and availability.
RECOMMENDATION B: PROGRAM EXPANSION
The results of the Disparity Study provide evidence for expansion of the current M/WBE program. The City should consider the following program changes:
- Revise the $100,000 contract cap in the Goods or Commodities
- Include Asian American firms in the Professional Services category in the M/WBE program for the purposes of crediting their utilization towards M/WBE participation
- Expand the current minority categories to include Native American
RECOMMENDATION C: GOAL SETTING
The Disparity Study provides support for the City’s current aspirational goal of 30% utilization for M/WBEs, for increases in the City’s current citywide industry-specific goals, and the establishment of new goals, such as for Asian Americans in the professional services category and Native Americans in all categories. The City should continue to set project-specific goals to further address disparities based on M/WBE availability for project scopes.
RECOMMENDATION D: PROGRAM COMPLIANCE
The City should increase efforts to ensure all contracts with M/WBE goals are subject to ongoing monitoring for subcontracting participation to make sure that prime contractors are making sufficient progress and complying with project goals.
RECOMMENDATION E: EXPANDING POLICY AND LEGAL TOOLS
The City should continue to expand its policy and legal tools to help increase M/WBE utilization, in collaboration with New York State.
RECOMMENDATION F: OUTREACH FOR M/WBES
The City should continue increasing outreach and recruitment of M/WBEs in the City’s program.
RECOMMENDATION G: TECHNICAL ASSISTANCE, CAPACITY BUILDING AND ACCESS TO CAPITAL
The City should continue its current programs that provide technical assistance, capacity building, and access to capital support. We recommend pursuing further expansion of such services and initiatives.
RECOMMENDATION H: REMOVING BARRIERS TO PARTICIPATION
The City should focus efforts on removing barriers to participation, which is important for increasing M/WBE participation in the City procurement.
By: REENA FLORES
Priya Basu, head of the Women Entrepreneurs Finance Initiative, touted the strength of the program in the latest episode of the Women Rule podcast.
“It’s been very challenging in some ways to work with so many stakeholders,” Basu said of We-Fi, the World Bank “start-up” that provides loans, mentorship and other services to women-owned businesses in developing countries. But, she noted, “a very welcome surprise has been that there’s so much commitment around everyone to sort of make this a success.”
According to Basu, We-Fi has already overshot its lifetime goal, which aimed to get a billion dollars in to the hands of women-led businesses by the year 2022.
“For the $120 million that we allocated” this year, she said, “we were able to mobilize an additional $1.6 billion,” with those extra funds coming from the private sector and other sources.
In April, We-Fi announced its first funding allocations for projects around the world, including initiatives to improve the business environment for women in some of the poorest conflict-affected regions in Sri Lanka and to grow already-successful projects promoting women-led businesses in Yemen, Mali and Nigeria.
Click here to read more.
By: Geri Stengel
Not everyone ignores women’s innovations. One trade group in the toy industry recognizes that women know what kids — and their parents — want. To encourage innovation, Women in Toys, Licensing & Entertainment (WIT) provides what entrepreneurs need: access to decision-makers and mentors to help them overcome obstacles.
As the primary purchaser of children’s toys, women are adept at perceiving market gaps and opportunities. “Our industry thrives on creativity and fresh ideas” said John Lee, cofounder and general partner of Bambini Partners. “Some of the most substantial toy and game brands in the market today were spawned by small, independent (female) entrepreneurs (Barbie Dolls, American Girl, Monopoly) who followed their passion and persevered in spite of daunting challenges to bringing their ideas to market.” Lee is a leader in the educational and developmental toy industry and is a WIT mentor.
But, as we all know, “It’s not what you know, but who you know.” If you didn’t go to an Ivy League school or come up the rungs of a big company in your industry, you may not have an existing network to get you where you want to go. Mentors provide guidance, advice, and, yes, may even open some doors for you. Not to worry about finding that mentor. Many organizations, not just accelerator programs, but also industry specific groups like WIT connect you to mentors.
To make sure women get the opportunity to showcase their ideas, WIT brings women together for WIT Empowerment Day, to be held this year on Monday, October 2, 2017, the day before Fall Toy Preview in Dallas. Entrepreneurs at every stage of development — from idea on a napkin to prototype to in production — get a chance to sit down with top industry experts in areas such as manufacturing, sales distribution, product testing, licensing, marketing and more. “Empowerment Day gives female entrepreneurs amazing mentoring and solid business leads that can help them launch,” said Nancy Zwiers, CMO at Spin Master. As a mentor Zwiers, advises attendees on “play value,” which bridges the disciplines of evolutionary psychology, child development and marketplace analysis.
It’s not just that toy retailers like Walmart that get access to innovative products for children, they benefit from increased loyalty from the primary buyer of toys — moms, “utilizing female businesses increases brand loyalty and commitment to these women-supportive companies,” said said Marsha Firestone, Ph.D. in Forget the Glass Ceiling: Build Your Business Without One. She is also president of Women Presidents’ Educational Organization, a regional affiliate of WBENC, an organization that certifies a business as women-owned. They show their gratitude with their purchases.
Click here to read more.