Equity more than equality has become a dominant social theme of this pandemic, and a new report from highlights the challenges faced by women-run businesses. A lack of networking opportunities, access to capital and obtaining funding were top of the list of obstacles in a survey of women business owners conducted in February and March this year.

These difficulties aren’t confined to institutional access but rooted in family attitudes as well. The study of more than 1,000 business owners (with $5 million-plus in revenues) found that when family members are invited into the business, 65 per cent said it was a son joining and 43 per cent a daughter. Research from the wealth advisory firm also showed that women are twice as likely than men to say they lack networking opportunities to grow their business. Female founders are also less likely to close the funding they need than their male counterparts.

Yet figures suggest that female entrepreneurs are among the fastest growing segment for SMEs in many regions. In the US over the past 50 years, minority women-owned businesses, for example, have grown from roughly 4 per cent in the 1970s to over 40 per cent today.

The findings suggest that while in an efficient free market economy capital goes to those who achieve the highest returns, regardless of gender issues, in reality that may not happen fast enough. Family Wealth Report has examined women-backed venture capital firms trying to acclerate access to capital for entrepreneurs as one way to tackle the issue.

Last year Wilmington Trust's parent group 's CEO Carolyn Dolezal. “For women business owners in particular, this means focusing on the quality of your connections versus the quantity," she said.

The survey also found that women are more cautious about tapping into their personal assets to support a business, with 31 per cent willing to do so versus 43 per cent for men. But it found that when women do invest in their own company, it is at a higher level than for men, especially for company founders (45 per cent versus 36 per cent).

On succession planning and bringing children into the business, although the survey found that more sons than daughters are likely to join a business (65 per cent versus 43 per cent as noted), it also found that female business owners are far more likely to involve their daughters (56 per cent) than their male equivalents (38 per cent.)

Marguerite Weese, national director of family legacy strategies at Wilmington Trust, said owners have not traditionally invested in developing their daughters or granddaughters into business leaders. “It requires educating them on business fundamentals and financial literacy from a young age, whether in the office or around the dinner table. Encouraging them to take leadership roles in other areas, so you are not suddenly handing them the keys one day,” she said.

But she says women are eager to get their daughters involved. “By identifying mentors, both inside and outside the family, owners can help the next generation of women build the leadership skills they need,” Weese said.

Sharon Vosmek CEO of the Silicon Valley-founded venture group is one UK wealth manager to recognise this deficit. Dolfin's head of investment Simon Black told this publication that the London firm, based in Mayfair, has a lot more female clients than traditional wealth management firms. He came across Astia through clients requesting co-investing opportunities and exposure to female entrepreneurs, and “almost all come from emerging markets,” Black said. “In developed markets, women aren’t receiving venture funding to proceed and grow. It’s not based on performance, they just don’t receive the same allocation of capital,” he said.

Neither Black nor his clients sees it as impact investing. “It’s investing in the space less occupied by venture capital funds. Although we are looking at financing entrepreneurs, it is less because of gender and more about what they are able to achieve with the same amount of capital,” he said.

Vosmek found that what is notable about companies with female leaders is that they sometimes don’t self-nominate. “We don’t wait for that, we are constantly scouring the planet for best-in-class companies. And what’s exciting is that they are out there!”

Solving problems
In Willmington’s study of what drives women to launch businesses, Marguerite Weese, in charge of family legacy at the US advisory, suggested that women tend to start a business when they see a void or problem in their daily life. “This may lend itself more to getting daughters rather than sons involved,” she said, describing a more root and branch approach.

With the job market drastically changing, “it will be interesting to see if there is an increase in family members working in the family business due to a lack of external opportunities as well as an ‘all hands on deck’ mentality to keep the family business going,” she added.

The group’s chief planning officer Donald DiCarlo said the pandemic more generally has made businesses adjust priorities, forcing owners to ask, “Where am I in this?” he said. “It is a common phenomenon that business owners over the years have become so busy and focused on being an entrepreneur and CEO that they never stopped to realize the most important role for them now is to be a steward of what they have already built,” DiCarlo said.

This is where successful owners need to go in their thinking, he added. “To see that planning is not just about building and transitioning a business and wealth, but also about transitioning a role and an identity - and helping others to be ready to do the same. That’s a continuous process. I think this type of planning mindset can give owners a greater sense of control during a crisis.”