Despite the fact that women-owned businesses are growing faster than those owned by men, women entrepreneurs face unique challenges, particularly when it comes to accessing capital, according to attendees at a U.S. Chamber event.

“Women start jobs. Men start empires,” said serial entrepreneur and Georgia state lawmaker Stacey Abrams (center) at the National Chamber Foundation’s Women in Business Forum on December 14.

“There is often a sense in Washington that the problems affecting women have been solved, that the discrepancy in the success of women-owned firms can be explained by women’s desire to balance work and family or a lack of desire in running a large corporation,” said Senate Small Business Committee Chair Mary Landrieu (D-LA). “This may be the case for some women— and men—but certainly not all.” Landrieu spoke at the Chamber’s “Women in Business Forum: Opportunities and Risks in an Uncertain Economy” on December 14. The event, attended by women leaders from the federal and private sectors, was hosted by the National Chamber Foundation, the Chamber’s public policy think tank.

Landrieu pointed out that women business owners, like all business owners, struggle to access capital and credit, federal contracts, and funding for technical assistance and counseling programs. She told the story of Katherine Kallinis and Sophie LaMontage, co-owners of Georgetown Cupcake in Washington, D.C. The two sisters were turned down “by at least 10 banks,” for a startup loan before financing their business themselves. Georgetown Cupcakes became an overnight sensation, with lines around the block, before Eagle Bank finally stepped in and offered them a loan to recapitalize their business. The business partners paid it off in six months. “We’ve got to get capital into the hands of enterprising young companies,” Landrieu said.

Private businesses owned by women have grown in number and have hired more workers than male-owned businesses in recent years, according to a recent U.S. Department of Commerce report. The number of women-owned businesses grew by 44%, to 7.8 million between 1997 and 2007, twice as fast men-owned firms.

However, despite these gains, women-owned businesses lag behind their male counterparts in financial capital, revenue, and employment. In 2007, male-owned firms employed 41.5 million people, more than five times the number women-owned companies did, and they generated $8.5 trillion in receipts. By comparison, women-owned firms had receipts of $1.2 trillion and employed approximately 7.6 million workers

Rebecca Blank, acting deputy secretary and under secretary for Economic Affairs at the U.S. Department of Commerce, suggested the difference was in part due to difficulties in accessing capital, but also differences in how financing is generated and used. Women-owned firms have lower levels of financial capital, use less outsider debt, generate less revenue and pay their workers smaller salaries, she noted.

Stacey Abrams, a Georgia state legislator and co-founder and chief operating officer for The Insomnia Group and Nourish Inc., says women face challenges when it comes to pricing their services. “We charged [clients] like men,” says Abrams, whose Insomnia Group specializes in investment, development, and consulting for complex and innovative real estate and business projects. “But our clients, especially men, would balk at the amount we would ask for. We knew from our male counterparts who were bidding on the same projects that this was not an issue for them.”

Abrams faced “the cupcake challenge,” when she and her partner Lara O'Connor Hodgson were seeking financing to launch Nourish Inc., a ready-to-serve baby bottle that comes with pre-measured purified water and a baby nipple top for moms-on-the-go. “Bankers would say, ‘well, it’s cute,’ but getting banks to understand the value of the product was difficult until we found a banker who had just had his own baby. He got it,” Abrams said. Now the product is in 15 airports and expanding into Whole Foods markets.

The differences between men and women go much further than capital, says Cynthia Good, chief executive officer, founding editor and co-owner of PINK Magazine, an online publication geared at women entrepreneurs. “Women undervalue themselves. They ask for less and their afraid to take risks,” Good says. She advises women to “ask for what you want and view the word ‘no’ as an invitation to try again.”

Other panels at the “Women in Business” event focused on how to get more women on corporate boards and policy hurdles such as burdensome regulations and higher taxes. Karen Kerrigan, president and chief executive officer of the Small Business and Entrepreneurship Council, said that the business community needs stability in the economic and political environment before it invests and hires. “Hopefully we are entering a new era, particularly with the new tax deal that looks like it will pass this week,” Kerrigan said.

In grade school, Susan O’Malley, former president of Washington Sports and Entertainment, wrote a paper about her desire to run a sports franchise. She discussed her journey at the first Women in Business Forum at the
U.S. Chamber.

The event wrapped up with a keynote address by Susan O’Malley, the former president of Washington Sports and Entertainment. At 29, O’Malley became the first female president of an NBA franchise when she took the helm of the Washington Wizards. O’Malley presented her seven rules for running a business: make your bed every day; plan your work and work your plan; outwork everybody; set expectations; do the right thing; when you mess up, make it right; and have fun.

Watch the event