additional factor may be that female owners of high-technology firms have less overall managerial experience than their male counterparts and are less likely to have previously owned start-up companies in the same field, since 55 percent of male owners have previously owned a high-technology start-up compared to 12 percent of females. Reedy pointed out that venture capitalists view this serial behavior—and even serial failure—as a mark of an entrepreneur being tested, because investors value an entrepreneur’s willingness to start over again and again.
Reedy further elaborated on the gender gap in the high-tech industry by quoting similar findings by other researchers. A 2006 study by Cross and Linehan found that in established high-tech organizations, women are often excluded from formal and informal networks that would otherwise provide access to managerial or technical leadership positions in those firms.3 Similarly, a 2005 study by Tai and Randi L. Sims4 found that women had difficulty gaining senior management experience that would make them attractive to external capital providers, should they start their own companies. Reedy considered the pervasive culture in such enterprises as a plausible reason for this gap, where issues such as work-life balance and family-friendly policies affect gender equity.
Despite the existing gaps, Reddy noted that women-owned firms represent a growing component of the small-business sector. According to a U.S. Census Bureau report,5 there were 6.5 million privately held women-owned firms in the United States in 2002. These firms generated an estimated $940 billion in sales and employed 7.1 million people. He continued to comment that women-owned firms now account for 30 percent of all firms, including self-employment and larger businesses. From 1997 to 2002, the number of women-owned businesses increased 20 percent. However, he noted that revenues from women-owned businesses increased less than 15 percent during this period, compared to a 22 percent revenue increase for all businesses.
A study on women-owned high-tech firms in four metropolitan regions in the United States—Silicon Valley, Boston, Washington, D.C., and Portland, Oregon— found that in all four regions women-owned high-tech firms were smaller in terms of average revenue and employment.6 Reddy suggested that women are more likely to form companies alone than in partnership with men, even though studies indicate that the success rate for new companies increases as the number of company founders increases. Women entrepreneurs are also more likely to participate in high-tech sectors such as software publishing, computer systems design services, research services, and management and consulting services; whereas men are more likely to establish companies in the manufacturing sector. Interestingly, Reddy noted both male-and female-owned start-ups were initially shown to be based out of the home, 50 percent of the time for males and 60 percent of the time for females, suggesting a focus on consulting efforts.
Female-owned high-tech start-ups do show a slightly higher survival rate than those owned by men. However, Reedy noted that women entrepreneurs launch high-technology firms with less financial capital than men, and continue to follow a different financial strategy over
3 Cross, C., & Linehan, M. (2006). Barriers to Advancing Female Careers in the High-tech Sector: Empirical Evidence from Ireland. Women in Management Review. 1, 28.
4 Tai, An-Ju R., and Randi L. Sims (2005). The Perception of the Glass Ceiling in High-Technology Companies. Journal of Leadership and Organizational Studies. 12 (1), 16–23.
5 U.S. Census Bureau (2006). Women-owned Business Grew at Twice the National Average, Census Bureau Reports. Retrieved August 15, 2009 from
6 Mayer, H. (2008), Segmentation and Segregation Patterns of Women-owned High-tech Firms in Four Metropolitan Regions in the United States, Regional Studies. 42 (10), 1357-1383.