Women Launch High-Tech Firms with Less Financial Capital than Men

ABSTRACT

In this short report, data was used from the Kauffman Firm Survey to examine the financing sources and strategies, by gender, of high-tech firms. The findings reveal that women entrepreneurs raised significantly smaller amounts of financial capital at startup than men did. When controlled for a variety of firm and owner characteristics, however, there were no significant differences between women and men in terms of total capital raised at startup. Nevertheless, even controlling for other variables, women high-tech entrepreneurs were significantly less likely to use external equity.

The research paper, Sources of Financing for New Technology Firms: A Comparison by Gender, is fifth in a series of Kauffman Firm Survey (KFS) studies. The KFS collected information on nearly 5,000 firms that started in 2004 and surveys them annually. The KFS is the first longitudinal survey of its kind, focusing on the nature of new business formation activity and characteristics of the firms and owners.