It’s estimated that Canada could add $150 billion to our gross domestic product by 2026 by advancing gender equality and boosting women’s workforce participation. Everyone in the ecosystem of contemporary capital has a part to play, writes Canadian Women’s Foundation CEO Paulette Senior, including philanthropists.
The most inspiring entrepreneurs I know are women. I’m thinking specifically of the Black, Indigenous, and racialized women entrepreneurs I’ve met who spearhead small and medium-sized enterprises.
They know how to stretch a dollar for miles. I’ve seen them build welcoming, safe workplaces for their diverse employees. I’ve witnessed their generosity, their passion to give back, even in the turmoil of financial storms and economic downturns. I’ve seen them soak in hard-won learnings, establish new and unusual partnerships, and persist through the many disappointments business owners are acquainted with.
Imagine the heights they’d reach if only discrimination weren’t blocking their paths.
It’s estimated that Canada could add $150 billion to our gross domestic product by 2026 by advancing gender equality and boosting women’s workforce participation. For all the bluster about prioritizing economic growth, Canada has been slow to make moves to break stimulus-suppressing gendered barriers. Think of the missed opportunities for job creation, innovation, and prosperity.
For all the bluster about prioritizing economic growth, Canada has been slow to make moves to break stimulus-suppressing gendered barriers.
Think of the missed community benefits, too. Women-led small and medium-sized businesses more often prioritize community development and social impact. Environmentally sustainable and socially responsible practices are often built right into their models and profit structures.
Financing authorized for male-owned businesses soars 1.5 times over the average authorized for women-owned businesses. The FoundHers survey of Black women entrepreneurs in Canada found that 65% of respondents have not secured any funding or could secure less than $50,000 in funding. Only 4% of venture capital funding is committed to women-owned businesses in Canada.
It’s not simply that funders and investors prefer men. Access to credit requires resources in the first place: higher incomes, stronger credit histories, collateral to leverage. These are the tools men have more of than women. It doesn’t mean they’re more responsible credit holders than women. It doesn’t mean they’re more deserving. It means that our economy ensures that those who already have are poised to get more.
On top of that, women and gender-diverse people don’t have the same connections to powerful people who can open doors and clear paths to success for small businesses. Women with disabilities, racialized and newcomer women, and LGBTQ2S+ community members are particularly barred from these tables.
If you aren’t in the same room as lenders, investors, and mentors who can support you, if they’re not your associates, colleagues, and friends, you’ll have a harder time raising capital.
And their absence in the leadership of financial institutions and in incubators and accelerators to seed ideas and commercialize products and services only widens the finance gap.
If you aren’t in the same room as lenders, investors, and mentors who can support you, if they’re not your associates, colleagues, and friends, you’ll have a harder time raising capital. You’ll have a harder time establishing your business in an environment that never considered your existence – let alone your talents – in the first place.
The contemporary solution to this long-standing problem is a novel approach to financing the ambitions of the underappreciated entrepreneur.
Blended financing models that offer an array of funds from philanthropic grants, loans with flexible repayment terms, and impact investments can fill the monetary gap. Pair that with intentional training, mentorship, and technical assistance programs, and we will do wonders for diverse women and Two Spirit, trans, and non-binary entrepreneurs seeking the resources, skills, and connections they need to be successful.
Philanthropists can catalyze investments from other impact investors and provide seed funding for blended finance structures, and they can absorb the early-stage risks most financial institutions are averse to.
Everyone in the ecosystem of contemporary capital has a part to play here. Philanthropists can catalyze investments from other impact investors and provide seed funding for blended finance structures. They can absorb the early-stage risks most financial institutions are averse to, proving the investment in women and gender-diverse entrepreneurs a worthwhile one.
Financial institutions, investors, and venture capitalists need to exercise their muscles and grow their expertise in gender-lens-responsive investing and financing. They need to be bold and commit to closing the financing gap faced by women and gender-diverse entrepreneurs.
Banks and lenders need to set up flexible collateral requirements, loan guarantees, low-interest loans and lines of credit with favourable terms, and transformative lending to reinvest in community wealth.
Governments need to incentivize blended finance programs, and the private sector needs to prioritize women-owned businesses in their procurement and partnerships.
The Canadian Women’s Foundation has taken a step through our Investment Readiness Program, along with partners and government funders across Canada. We’ve invested in 90 social purpose organizations – charities, non-profits, social enterprises, businesses with a social purpose, and co-operatives – by and for diverse women and Two Spirit, trans, and non-binary people. Eighty percent of these organizations are led by the very communities they serve. It has been refreshing to witness their rise and hear their stories of persistence, even in challenging economic times.
It’s a starting point for the change Canada needs to make our economy better for the women and gender-diverse entrepreneurs who will, in turn, enable that economy to flourish in sustainable, community-affirming ways. This is a virtuous new cycle that can begin only by dismantling old barriers.