3 Reasons Women Don’t Start Businesses (Even When They Should)

Last year, seven women started businesses for every ten men who did the same. So why, then, does the 2012 Global Entrepreneurship Monitor (GEM) U.S. Report say that there’s a “big confidence gap” between male and female entrepreneurs?

Elaine Pofeldt, who covers the entrepreneurs beat at Forbes.com, went looking for answers, and isolated a few findings from the report that she found especially troubling.

1. Men are more confident in their abilities.

“About three-quarters of both male and female entrepreneurs start businesses to pursue an opportunity (rather than out of necessity), but men show more positive perceptions about opportunities and their own capabilities, as well as lower fear of failure,” according to the report. Obviously, a less confident entrepreneur is likely to woo clients and backers. They might also be inclined to take fewer risks.

2. Women use their savings, men get loans.

The women in the study started their businesses with a median amount of $8,000; men had $30,000. Women were also more likely to use their own cash or borrow from family members, while men got bank loans.

3. Men are more likely to know other entrepreneurs.

It seems contrary to the great cliche of women as social connectors and men as isolated individualists, but men were more likely to have robust professional networks upon which to draw when starting their businesses. They were also more likely to already know someone who had branched out on his own, providing them with a valuable source of information (and maybe even a few stories about what not to do).

Why is all this a big deal?

“I’m a big believer that business ownership is an important path to economic opportunity and greater equality for women — and can be a lifeline for those who need the flexibility to balance work and family,” Pofeldt writes. No one needs flexibility and economic opportunity like working moms.

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