Out of the top ten wealthiest self-made women in the United States (ranked by Forbes magazine), nine are entrepreneurs. Although there are many obstacles to overcome as a female entrepreneur, this ranking reveals that entrepreneurship is one of the best paths for women to become billionaires.
Two familiar names on the list are Oprah Gail Winfrey, Founder, and Chairman of Harpo, Inc. and Judy Faulkner, Founder and CEO of Epic. Both of these women have phenomenal entrepreneurial success stories – all on their own. The other honorees are co-founders who had male business partners. Marian Ilitch, co-founder of Little Caesars Pizza; Diane Hendricks, the chairwoman of ABC Supply; and Johnelle Hunt, former corporate secretary of J.B. Hunt Transport Services all earned their wealth alongside their husbands.
This fact may come as a surprise, although it is the most common business model for female entrepreneurs to follow. Researchers have discovered that less than 50% of start-ups that are worth over $10 million have one founder.
The husband-wife partnership model
There is an extensive history behind the popular husband-wife partnership model. When many of the women listed above began their business ventures, there were stringent laws preventing women from starting businesses on their own. For example, women were not allowed to have their own line of credit until 1974, making solo business ventures virtually impossible. In partnering with their husbands, these women would have access to the capital needed to start a business.
Understanding the funding gap
Fortunately, such regressive barriers have now been lifted, opening the door for talented women to thrive as business owners. While the laws may have changed, current statistics regarding women-owned businesses still reflect beliefs of the past. According to Fortune Magazine, in 2016 nearly 6,000 companies founded by men were supported through venture capital, while only 359 companies founded by women received the same funding. In addition to these statistics, around 1,000 companies with both male and female founders received venture capital. Many women have opted to start a business with a male partner in order to bridge this funding gap, but there are other options for those who do not wish to have a business partner.
Independent entrepreneurial success
The recent success story of Carolyn Rafaelian, founder and CEO of the popular jewelry brand Alex and Ani; Forbes magazine recently named her “the richest jeweler in America.” She created the line in honor of her daughters in 2004 and garnered national attention after she began creating custom pieces for celebrities. In many cases, female entrepreneurs build their companies around a need or interest that was discovered within their personal lives. Brands such as Spanx, Vera Bradley, and IT Cosmetics were initially created for the designer’s personal use but were later released to the consumer market.
Studies have shown that women-owned businesses are growing at a quicker rate than the rest of the business market, even with limited funding. The 2016 State of Women-Owned Businesses Report has revealed to us that there are about 11.3 million women-owned businesses in the U.S., employing over nine million people and generating a revenue of more than $1.6 trillion.
Creating your success story
The pathway to self-made success for female entrepreneurs has changed drastically over the last four decades, and there is still progress to be made. There is more women-owned business now than ever before, and more opportunities for new entrepreneurs to enter the arena. Women are overcoming the obstacles of doubt and limited funding to create entities that benefit the economy as a whole. Forbes Magazine emphasizes, “[…] women are going into business and doing it very successfully.” One can only imagine the opportunities that will be available forty years from now.