Laura Didyk
National Lead, Women Entrepreneur Strategy - Business Development Bank of Canada (BDC)
Part of the Spotlight on Women in the Future Economy

Diversity Makes Good Business Sense

Takeaways

  1. Although men and women entrepreneurs have the same needs, women entrepreneurs approach business differently; they tend to have a higher awareness of risk and are less likely to seek external funding.
  2. Financial literacy is one area where women entrepreneurs often lack the skills and knowledge to get their business started or to the next stage of growth, which may hold them back from getting the financing or the investment that they need.
  3. More diverse boards, ownership and employee bases generate higher revenues, larger profits and export opportunities.

Action

Female entrepreneurs should build networks, develop close mentorships and trust themselves to create and scale their businesses.


How do female entrepreneurs’ needs and challenges differ from those of their male counterparts?

Their needs are the same but women entrepreneurs approach business differently on many fronts. Women have a higher awareness of risk, which can impact their decisions to seek the capital they need to accelerate the growth of their business. Women are less likely to seek funding and they tend to rely more on their personal savings. They sometimes have negative perceptions about dealing with banks and other institutions, which leads many to avoid looking for external sources of funding. They also take a more holistic approach to assessing risk; they consider not only the impact of failure on themselves but also on the people around them, like their family and friends. In some situations, that may hold them back a little bit with growth plans. Just like men, women entrepreneurs are also willing to tap into others for their expertise and support. But this only helps if they actually have networks to tap into since business networks have traditionally been male dominated.

“Women have a higher awareness of risk, which can impact their decisions to seek the capital they need to accelerate the growth of their business.”


Why is supporting female-owned and led businesses an important issue?

We know the statistics. Although women constitute almost half of the workforce and Canadian women are starting businesses at a higher rate than their counterparts in all other G20 countries, only 16% of SMEs in Canada are majority women-owned. Promoting women entrepreneurs is good for the economy and for Canada overall. Diversity is Canada’s strength and opportunity. Diversity makes good business sense. Stats have shown that businesses are more successful in every key performance indicator the more diverse the board, the ownership and the employee base are. They generate higher revenues, larger profits, and export more.

“Although women constitute almost half of the workforce and Canadian women are starting businesses at a higher rate than their counterparts in all other G20 countries, only 16% of SMEs in Canada are majority women-owned.”

Every sector can benefit from more diversity in general, not just more female participation. In particular, between 2010 and 2015 only 10% of venture dollars in the tech industry went to start-ups with at least one female founder. BDC believes that we have the capability to step in and help more women become founders, and their companies grow and achieve scale, which in turn, will create a richer ecosystem.


How is BDC supporting women in business, entrepreneurship and tech?

BDC has taken a very comprehensive approach to supporting the needs of women entrepreneurs by offering a full spectrum of financing, advisory services and capital solutions. The 2018 federal budget and the government’s strategy for women entrepreneurs complements the measures that BDC has taken since 2015. That includes our commitment to increase our term lending to majority women-owned businesses. In this vein we created the Women in Technology Venture Fund (WIT), which is the world’s largest venture capital fund solely dedicated to investing in women-led technology companies.We have also sponsored hundreds of networking opportunities and learning events specifically for women entrepreneurs in all industries and stages of growth. We have also launched a series of boot camps to enhance women’s business skills and financial literacy. Financial literacy is one area in which women entrepreneurs are sometimes not as savvy, which may hold them back from getting the financing or the investment that they need.

“Only 10% of venture dollars between 2010 and 2015 went to [tech] start-ups with at least one female founder.”

In 2015, BDC committed to lending $700 million to majority women-owned business by 2018 and I am very happy to say that we surpassed this objective by lending $1 billion to this day. We also increased the number of majority women-owned clients in our portfolio by 52% since 2015. But BDC knew it could do more, so we announced in 2018 some of our ongoing commitments to women entrepreneurs. We have four key actions or pillars. One of them is increasing our lending commitment even more and making services more accessible to women entrepreneurs. So we set a target for ourselves of $1.4 billion in lending to women entrepreneurs by the end of fiscal 2021. We are also making unconscious bias training part of BDC’s ongoing curriculum for our employees internally. Our second action is that we are using a tailored approach to address certain needs of women entrepreneurs, so we are offering tailored executive coaching and online training modules to help women entrepreneurs develop the skills that they need. We are encouraging increased diversity to create a vibrant ecosystem and hope to change market perceptions to overcome the unconscious bias against female founders in the VC market. We are therefore imposing better standards in this space through the development of a code of conduct for the industry. We are also building on our women in tech strategy by providing coaching to female founders and implementing a residential program for entrepreneurs. Lastly, we are bringing all the players together to create a cohesive environment, share more risks and create more opportunities for women entrepreneurs.

“In 2015, BDC committed to lending $700 million to majority women-owned business by 2018 and I am very happy to say that we surpassed this objective by lending $1 billion to this day.”


What is your advice for Canada’s young female entrepreneurs?

Educate yourself. Find a good a mentor. It does not necessarily have to be a woman; it could be whomever you can connect with and get the tools you need from them. Surround yourself with a solid network of people and trusted organizations, and sometimes that just means showing up at events, getting out there, shaking hands and selling your potential and your business. Take a chance on yourself. Women entrepreneurs do trust their instincts, but I would encourage them to trust themselves to take the plunge, be more ambitious and never sell themselves short.