Are Women Owned Businesses Better Investments?

Over the course of the past 24 months, we reviewed over 3,500 early stage investment proposals. A majority of the entrepreneurs we spoke with were men. After cutting out the fat (the business models that simply force us to scratch our heads and mutter “huh?”) and wrapping up pre-due diligence conversations, we came to a conclusion that shocked us. When equally matched (i.e. same industry, talented management team, lot’s of traction, etc), on the surface, women owned businesses will disproportionately prove to be the better investments. Before all the men out there throw their arms in the air and call us crazy, here are the seven completely unbiased observations that led us to this conclusion.

1. Women tell the truth. They lack the bravado many of their male counterparts covet. When you ask a female business owner a question, you get a straight to the point, unfiltered, answer. Often, male egos stand in the way of the “whole truth”, and much time is wasted in the process of sorting through the details. 
2. Contrary to popular belief, women are quicker at making decisions. They take ownership of what they are working on, research and understand the potential risks and rewards, and when it comes to making a “yes” or “no” decision rarely opt for maybe. While many of their male counterparts are revered for their “fire from the hip attitude”, female business owners typically use a “ready, aim, fire” approach which allows them to make clear and informed decisions. 
3. Many male business owners sign an agreement or contract, and then find any number of reasons to delay moving forward, change their mind, or run and hide. When making business decisions, women rarely suffer from buyer’s remorse. 
4. Female business owners under promise and over deliver. A woman’s word is the gold standard. When they commit to accomplishing a task, you can count on them to see it through to completion. Often, male business owners will throw out verbal commitments with little sensitivity to actually following through. Frequently, for male business owners, close is good enough. This is never the case for their female counterparts. 
5. In a “man’s business world”, many women business owners have a chip on their shoulder. This is not a good thing, it’s a GREAT thing. While this is pure speculation, we believe it pushes female business owners to be that much quicker, better, and stronger. 
6. Female business owners are “tougher” than their male counterparts. They take criticism regarding their businesses better than men. Men take criticism to heart, as if you are insulting their baby. As long as you have a woman’s respect (and she knows that you have her best interest in mind), she will take constructive criticism in stride and use feedback to push forward. Not to mention, women are better at making tough management decisions. A woman will always make the tough call (i.e. fire a key employee) quicker and with less drama than a man. 
7. Women business owners are both natural leaders and empowered decision makers. It is common that male business owners put off making important business decisions and defer to statements like, “first, I need to speak with my wife”. On the other hand, you will NEVER hear a female business owner say that she needs to discuss an important business decision with her spouse. 

To be fair, we are fans of every entrepreneur. The heart and soul of the entrepreneur is the foundation our great country was built upon; and, regardless of gender, it is that heart and soul we cherish. When it comes to raising money and speaking with potential investors, male business owners would be wise to steal a few plays out of their female counterparts’ playbooks.