Causes of the gender divide within entrepreneurship ecosystems

Abstract

Knowledge about connections within a local economic system holds implication for understanding the ways in which individuals and categories of entrepreneurs access the system itself and resources provided within. While scholars have recently found complex divisions of networks within local entrepreneurship ecosystems, we still have a limited understanding about why these chasms exist. We present a case study with qualitative research in the entrepreneurial ecosystem of St. Louis, Missouri, which identifies structural sources of divergence in networks. Specifically, we find a gender gap in the ecosystem that reveals patterns of difference in access to resources and in the experiences of women relative to men entrepreneurs. Thus, we contribute a more nuanced understanding of how discrete elements within a system’s networks diverge, as well as identifying the root causes of this divergence. The article concludes with implications for theories and practice.

Keywords

economic development ecosystem entrepreneurship gender networks women entrepreneurs

Introduction

Scholars and practitioners increasingly view entrepreneurship as a local system of resources geared towards economic development and sustainability for communities and regions (Malecki, 2018; Qian, 2018). While this focus on entrepreneurship shifted the primary economic agents from industries and large firms to individual entrepreneurs, we still have limited understanding about how the networks of entrepreneurs and their interconnectedness with other local stakeholders shape the ecosystem itself. Importantly, research is finding disconnections of networks within local ecosystems in the form of disparity between men and women entrepreneurs (Brush et al., 2019; Coleman and Robb, 2012, 2016).

In this article, we seek to contribute to the field not only by highlighting disparities due to gender in a rich qualitative context but also by analyzing the underlying causes of the gender disparity. Thus, our research questions are: Are the entrepreneurial networks of women and men entrepreneurs in St. Louis disconnected? If so, why? Our premise is that gender remains a central organizing principle among actors in entrepreneurial ecosystems, and we identify two structural reasons that networks remain divided according to gender: (1) disconnections of women entrepreneurs from mainstream support resources and (2) opting out of local support resources by women entrepreneurs. Beginning with a review and critique of the literature, we then explain our methods, the sample, and the research focus. After an analysis of the data, we share key findings and implications, then conclude with ramifications for researchers and practitioners.

Literature review

Development of entrepreneurship ecosystem studies

As entrepreneurship is increasingly perceived as a main driver of new job creation and economic development (Haltiwanger et al., 2013; Motoyama, 2020; Qian, 2018), the number of studies on this subject identified in Web of Science have increased from 18 in the 1990s to 91 in the 2000s, to 383 in 2010–2017 (Malecki, 2018). The conceptual focus on the entrepreneurial “environment” has been replaced by reference to the entrepreneurial “ecosystem” over the past decade. Early studies focused on identifying elements of the local ecosystem, and commonly identified elements include finance or venture capital, networks or social capital, skilled labor or human capital, and support services (Cohen, 2006; Feldman, 2001; Isenberg, 2011; Neck et al., 2004; Ross et al., 2015; Stam, 2015).

However, these studies provided little understanding of how those elements interact (Malecki, 2018; Mason and Brown, 2014). This is the same limitation of earlier regional development theories, such as cluster theory (Porter, 1998, 2000). In other words, despite emphasis on the interconnectedness between elements, scholars have largely focused on discrete ingredients rather than the “recipe” (Martin and Sunley, 2003; Motoyama, 2008). This weakness in understanding the interconnectedness among discrete elements is apparent when there exists confusion, for example, in identifying actors and organizations, as well as networks as some of the elements of the system (see for example, Feldman, 2001; Stam and Spigel, 2018). By definition, networks are a linkage between actors. If scholars do not differentiate between who or what is in the system and how those actors interact, then this inhibits a better understanding of the system itself.

Other and more recent studies attempted to describe those connections within a system. Mason (2008) and Mason and Harrison (2006) found that role models of successful serial entrepreneurs play a critical mentorship role for younger generations of entrepreneurs and their ventures, which creates the so-called entrepreneurial recycling within the ecosystem. Motoyama and Knowlton (2017) and Motoyama (2019) traced individual-level connections between peer entrepreneurs, support organizations, experienced entrepreneurs, and other broader supporters. Spigel (2016, 2017) used a holistic macroeconomic way to describe the intersections between social, cultural, and material attributes. Thus, while we have gained some insights about connections within the ecosystem, our understanding is still in an early stage, and several scholars have called for additional research to understand the function of connecting, networking, and institutional intermediaries (Breznitz and Taylor, 2014; Clayton et al., 2018). This limited knowledge about connections within a system has a larger implication for understanding the ways in which individuals and categories of entrepreneurs access the system itself, including resources provided in the ecosystem.

Identifying disparity of women entrepreneurs

Over the same time frame the entrepreneurial ecosystem body of work developed, a parallel body of scholarship developed that identifies both the magnitude of disparities between men and women entrepreneurs. With regard to finance, women entrepreneurs rely more heavily on debt financing and are much less likely to access equity investment relative to their male counterparts (Brush et al., 2014, 2019; Coleman and Robb, 2009, 2012; Liner and Bhandari, 2017; Minniti, 2009; Minniti and Nardone, 2007). In addition, women entrepreneurs receive less favorable treatment in terms of loan size, interest rates, and collateral requirements (Treichel and Scott, 2006). Some of the gap might be explained by gendered sectoral differences, preferences of venture capitalists, and growth orientations: men entrepreneurs pursued more aggressive growth businesses and expressed desire for venture capital financing, while women entrepreneurs sought growth-oriented, but more manageable and the so-called lifestyle ventures (Coleman and Robb, 2016). Others have found that, on average, men tend to conduct entrepreneurship for financial success, whereas women entrepreneurs tend to consider financial success as just one of many reasons for pursuing an entrepreneurial career, while equally emphasizing the quality of life in the community (Coleman and Robb, 2012; Jennings and Brush, 2013; Manolova et al., 2012). Ruef (2010), Neumeyer et al. (2019), and Sperber and Linder (2019) further found differences in support networks and connectivity that disadvantage women relative to men.

However, these findings are so far about uncovering the differences or the disparity between men and women, i.e. how much men are advantaged relative to women as entrepreneurs in ways not tied to merit. We still have limited understanding about why such difference or disparity is perpetuated. Marlow and McAdam (2012), Amezcua et al. (2019), and Ratinho (2020) found that business incubators often did not support inclusive or adequate support for women entrepreneurs. Wheadon and Duval-Couetil (2019) explained how stereotypical gendered beliefs created gendered characterization, and popular media like Shark Tank contributed to make such characterization. While these studies are insightful, they fall short to explain the fundamental ecosystem and the division within. Brush et al. (2019) organized the disparity of men and women entrepreneurs at three levels: individual, organizational, and institutional. However, this again helped to explain the disparity at different levels, but not the causes of it. In this article, our objective is to engage in and contribute to this question of understanding the underlying causes of difference between the networks of men and women entrepreneurs.

In particular, we will critically examine two aspects of the entrepreneurship ecosystem theory. The first is an implicit assumption in which any transaction is purely industrial, market, or economically driven. Thus, despite the emphasis entrepreneurship ecosystem studies have placed on the importance of entrepreneurs and individuals at the center of the system, they inherit an assumption from past regional development theories that any firm or individual involved in economic production can join the value chain and benefit from the entrepreneurial resources in the region. For instance, Feldman and Francis (2006: 118) described this assumption about “one for all, all for one” as a fully functioning entrepreneurial environment that coevolves to support entrepreneurs in a coherent system. This assumption, fueled by a weak understanding of networks, leads to a somewhat self-contradicting notion that the theory is rather person agnostic. In other words, ecosystem theories have been largely oblivious to the existence of people outside networks who may not have access to them.

Second, we suggest that existing theory on entrepreneurial ecosystems has provided limited understanding about the interaction between social and economic dimensions. In general, scholars in economic development agree with the embedded nature of economic and social activity. However, the implication from this embeddedness based on Granovetter (1985) extends to a far larger sphere. That is, if a distinctive regional entrepreneurial culture is supported by a high degree of civic mindedness (Bramwell et al., 2008; Neck et al., 2004) and if the social dimension affects economic activities, social division may also affect economic activities intentionally or unintentionally. For example, if role models (Mason, 2008; Mason and Harrison, 2006) are important by creating new connections among entrepreneurs and between entrepreneurs and supporters, who becomes the role model will substantially shape the system as well as who participates in these mentoring relationships, thus affecting the structure of interconnectedness in the ecosystem.

If obstacles for women entrepreneurs are cultural or institutional in nature (Freire-Gibb and Gregson 2019; Muntean, 2013), barriers may be structural, including at the local level. Here, we can learn from feminist geographers who have conducted broad interrogation of systems, institutions, processes and outcomes that disadvantage women. For example, Dolores Hayden critiqued extant urban design, planning, housing and economic development policy in the United States and provided a re-envisioned alternative non-sexist city that transformed “the sexual division of domestic labor, the privatized economic basis of domestic work, and the spatial separation of homes and workplaces in the built environment” (1980: S187). More recently, Parker revealed deeply embedded inequities in power relations in urban politics, including heavy resistance to feminism and the emancipation of oppressed groups, “discounting of women’s opinions” throughout the planning process, “hostility toward efforts to politicize inequality” and “intentional covertness” in the attempt to “protect privilege” (2016: 2–3).

In sum, while entrepreneurship scholars have noted both the importance of networks within an ecosystem as well as a consistent and significant gender gap in entrepreneurial outcomes, we have limited understanding about how and why those networks are fractured within a local system particularly between men and women entrepreneurs.

Method and data

We analyze the reported experiences of entrepreneurs in St. Louis, Missouri, in order to address divisions and fractured networks within an entrepreneurial ecosystem. This location is particularly an apt selection, given the relatively low and stagnant growth of women participating in entrepreneurship in the region: American Express’s The State of Women Owned Business Report (2013) reported St. Louis as tied for last among 25 major metropolitan areas in growth of women-owned firms from 2002 to 2013. The Survey of Business Owners corroborates a gaping gender gap, as women-owners account for just 36% of all business relative to men-owners comprising 52% of all businesses (Census Bureau, 2012). At the same time, St. Louis has embraced entrepreneurship and immigration as the two core pillars of their rejuvenation strategy since the mid-2000s when both the public and non-profit sectors made concerted efforts toward establishing a cohesive support system for startups in the region (Arch Grants, 2015). The number of entrepreneurial support organizations has grown rapidly; at least 20 new organizations have become active since 2010 (Motoyama and Knowlton, 2017).

In order to analyze divisions and dynamics in the ecosystem, we employ qualitative interviews, increasingly sought in entrepreneurship research to uncover the mechanism and processes involved in entrepreneurial activities (Gartner and Birley, 2002; Neergaard and Ulhøi, 2007). This method is particularly suited to examining underlying mechanisms and assumptions embedded in the very practices and concepts of entrepreneurship (Chell and Karataş-Özkan, 2014).

Since women are an underrepresented population of entrepreneurs, we mixed stratified, targeted, and snowballing strategies for sampling. First, we stratified our sample by interviewing recipients of Arch Grants, a local non-profit fund with a mission “to create an entrepreneurial culture and infrastructure to build successful companies in St. Louis” (Arch Grants, 2014). This is a business plan-based competition which provides a $50,000 equity-free grant, an incubator office space, pro-bono support services, mentoring, and connections to local resources to 15–20 firms annually. We reached out to recipients of the 2012–2014 cohorts. In theory, this competition is assumed to be gender neutral and subject to a meritocratic process; however, there is a heavy skew of rewards given to male entrepreneurs or male-only start up teams. As a result, we interviewed 36 men entrepreneurs and 10 women entrepreneurs from this sample.

Because of the underrepresentation of women, our second sampling strategy was to specifically target 20 women entrepreneurs who participated in Prosper, a mentorship program dedicated to the promotion of women entrepreneurs. Third, we added an additional four women entrepreneurs based on referrals from these program participants. In addition, we interviewed seven women and ten men from entrepreneurial support organizations.

In total, we conducted 88 interviews, with 42 female and 46 male participants in order to analyze comparative perspectives on the gendered context between men and women entrepreneurs. In addition, we supplemented our data with multiple field observations at networking and speaker events (See Table 3). We followed Eisenhardt’s (1989) and Eisenhardt and Graebner’s (2007) scholarship for fieldwork research using interviews and observations. We analyzed data using iterative coding techniques for within-subject analysis and across-subject analysis, which enabled us to organize data into emerging themes. We first coded themes around (1) the origin of the business and personal identity, (2) the overall ecosystem in St. Louis, (3) biases and challenges experienced, and (4) issues related to support organizations. We then reorganized them into two larger themes that the next section will explore: (1) the disconnection of women entrepreneurs from the mainstream ecosystem and (2) opting out of local support resources, which were further broken down with more detailed sub-themes.

A summary table of sectors for women and men interviewees is provided in Table 1, as well as for our field observation events in Table 3. There was some concentration of women entrepreneurs in consumer goods (9), IT (8), and business services (6), but other sectors include human resource (4), medical/health (3), and manufacturing/engineering (2). There was higher concentration of men entrepreneurs in the IT and medical/health sectors, but it does not characterize that women and men entrepreneurs operated in completely different sectors.

Table 1.

Sectors of interviewees by gender.

Sectors	Women interviewees	Men interviewees
Consumer goods	9	6
Informational technology	8	12
Business services	6	7
Human resource	4	0
Medical/health	3	9
Design	2	0
Manufacturing/engineering	2	2
Finance	1	0
(Support organizations)	7	10
Sub-total	42	46

Note: There were three cases of companies that had more than one interviewee, and each interviewee is reflected twice in the table. Thus, the numbers of interviewees do not reflect the numbers of interviewed companies.

We provide a list with names and types of support organizations in Table 2. We interviewed a range of organizations, from venture capital or angel investment to co-working or incubating space.

Table 2.

Interviewed support organizations.

ESO	ESO type
Arch Angels	Venture capital
Arch Grants	Competition/prize
Arsenal Ventures	Venture capital
Billiken Angels	Angel investment
BioGenerator	Accelerator
BioSTL	Resource organization
CIC	Co-working space
Cultivation Capital	Venture capital
Gateway VMS	Mentorship
ITEN	Programming
Prolog Ventures	Venture capital
Prosper	Accelerator
STL Venture Works	Programming
Techli	Informational resource
T-Rex	Incubator
Venture Café	Programming
Washington University	University center

CIC: Cambridge Innovation Center.

Table 3.

List of field observations.

Hosting organization	Event name/type	Date
1 Million Cups	Weekly presentation	2013 Jun.
St. Louis Public Radio	Panel discussion	2013 Aug.
CIC (Cambridge Innovation Center)	Tour of facility	2014 Feb.
Invest Midwest	Opening reception	2014 Mar.
SixThirty (tech accelerator)	Cohort announcement party	2014 Apr.
Arch Grants	Finalist showcase event	2014 Apr.
WEST	Event: “Inclusion in St. Louis”	2014 Sept.
Washington University	Event: “St. Louis Ecosystem"	2014 Sept.
T-Rex	Tour of facility	2014 Sept.
CIC (Cambridge Innovation Center)	Launch party	2014 Oct.
ITEN-Bio STL	Inclusion special interest group	2014 Oct.
T-Rex (incubator)	Opening reception	2014 Nov.
Startup Connection	Weekly networking	2014 Nov.
TechArtista (incubator)	Social event	2014 Dec.
Venture Café	Weekly networking	2015 Jan.
ITEN	Symposium for diversity	2015 Jan.
Venture Café	Networking, “office hours”	2015 Feb.
Venture Café	Weekly networking	2015 Nov.
Multiple	Event: “Innovation for future”	2016 Sept.

Findings

While we did not find sufficient and consistent evidence that suggest explicit and intentional exclusion of women entrepreneurs in the St. Louis ecosystem, we did find substantial disparities between the connections of women and men entrepreneurs. Systemic patterns suggest these disparities fall into one of two categories. The first pattern is the disconnection based on gender in which women entrepreneurs are isolated from support resources and other entrepreneurs, or connected only to other women entrepreneurs in the region. Either way, there is a clear disconnect between women entrepreneurs and men entrepreneurs where the latter are more engaged with resources and support organizations in the local area. The second pattern is opting out of the local support system: other women entrepreneurs were aware of local entrepreneurship resources frequently, but decided not to use or participate in those programs or events. There are several reasons for this act of opting out, from cognitive dissonance to feeling unfit or even rejected. We explain each pattern and provide examples in this section.

Disconnection based on gender

First, despite being in the same geographic area, the majority of women entrepreneurs were not aware of the general resources available in the entrepreneurial community, including mentorship, funding, and other general support services. In contrast, the men interviewed were broadly aware of resources offered.

Disconnected women entrepreneurs

Many women entrepreneurs were isolated and expressed challenges in taking the first step of finding local support and resources. A woman in a support organization described the typical challenge for women entrepreneurs: “I think the difficulty is just knowing where to go … who is willing to spend time. You know, you can find help, but if you don’t know where to go, how to find that, that’s difficult” (s.o.A). In parallel, women entrepreneurs often expressed isolation within the ecosystem. In particular, one woman entrepreneur described the entrepreneurial journey when seeking resources as a struggle: “at this point I’m just giving myself some breathing space because it’s been two years of monotony and scrambling and very tough” (ent. I).

As the above quotations suggest, the types of challenges that women entrepreneurs faced span strategic, marketing, management, and financing decisions, including pricing products (eight cases), finding clients or new markets (six cases), funding (five cases), and time management (three cases). This lines up with the general experiences of new entrepreneurs, who face a number of challenges, such as determining how to formulate a business plan, what type of funding might suit the company, what kind of support programs or events to attend, how to select their first few employees, and how to fire employees. This kind of hands-on knowledge about starting and running companies is hard to acquire through standard textbooks or entrepreneurship courses because of the heterogeneity of businesses and need for unique advice. These are typical challenges that any startup entrepreneurs face, and we found no subject differences between men and women entrepreneurs, which is consistent with past studies (Aulet, 2013; Motoyama and Knowlton, 2017; Thiel, 2014). This creates a dichotomy in which men entrepreneurs found support services, while women entrepreneurs did not find such resources despite being located in the same region and facing similar entrepreneurial issues.

Disconnected until they found first women connections

The other pattern we found was the isolation of women entrepreneurs until they found the entrepreneurial group specifically oriented to women entrepreneurs. One entrepreneur summarized: “everything kind of has come through there. That’s my doorway into it all. I think without that I would have been flailing around and not knowing where to go and it would have taken me a lot longer” (ent. A). A senior woman entrepreneur who has been running her business for a number of years in St. Louis and has served on the board of the Professional Women’s Alliance communicated the importance of networking and receiving feedback from other follow entrepreneurs: “because if you’re not known, there is no business” (ent. N). However, she continued to express that she did not know the specific support group for women as “I had heard nothing about it. Until then” (ent. N).

Similar to the above women’s struggles to get connected and receive information about programming, another entrepreneur expressed she “did not find a formal mentorship group earlier, but found a connector [to the women’s group]” (ent. L). The same entrepreneur continued to describe her experience:

women tend to find each other because we’re a smaller microcosm here in terms of entrepreneurship. So we all kind of know each other. So, it’s one of those, like, I just sent the link to somebody the other day and said ‘Why aren’t you in the Prosper mastermind group?’ and she’s ‘What is that?’ (ent. L)

Likewise, a woman in a support organization is well aware of this situation that “the resources for that [businesses for women] are fewer and far [between]”, which specifically led to her rationale to launch the organization dedicated to women entrepreneurs.

Women who had previously felt isolated had gone on to form a strong community among themselves within the female-focused support organization. Many women entrepreneurs conveyed their appreciation of the group, which ranged from “very valuable” (ent. B) or “very helpful” (ent. G) to “really, really great” (ent. M), “phenomenal” (ent. P), “hearts in the right place” (ent. K), and “sisterhood” (ent. H). Another entrepreneur described that the advice she got was “life changing” to her business (ent. L). Alternatively, a woman entrepreneur considered the group as a “monthly therapy. Because nobody knows what the entrepreneurial world is like better than another entrepreneur. So we have our therapy once a month and we all sit down together and we talk about the challenges that we have” (ent. J).

This pattern of women experiencing marginalization from the mainstream entrepreneurial ecosystem was observed even with experienced entrepreneurs who served as mentors in the support groups: “it wasn’t that they [experienced women entrepreneurs] weren’t willing to make time, but nobody had ever asked them” (s.o.B). Since the presence of successful women per se did not naturally reflect key figures in the local scene, one woman in a support organization “wanted to make sure every panel that I did, every workshop that I put on, every event, that there were significant numbers of women entrepreneurs there to represent as role models for those girls that were in the room” (s.o.B).

These statements indicate that the initial isolation from the ecosystem stimulated within-gender bonding and support after women connected with other women. Yet, if the majority of women are not connected to the ecosystem whatsoever, this raises challenges for seeking the requisite resources for success. In sum, we found clearly gendered divisions in experiences within the local entrepreneurial ecosystem and access to support for their ventures.

Opting out of local support resources

Another structural pattern that emerged in our data is that many women entrepreneurs who are aware of local support resources and programs do not engage with entrepreneur support organizations or events as they are not inclusive of women. As a result, those women opt out of pursuing further resources or continuing engagement with the local entrepreneurial community due to struggling with their identity as women versus the ideal type (male) of entrepreneur portrayed to them, or experiencing exclusion in their interactions that they attribute to their gender.

Not identifying as entrepreneurs

Some women expressed the experience of cognitive dissonance between their own identity as female and that of “an entrepreneur.” Multiple women entrepreneurs explicitly mentioned that they did not consider themselves entrepreneurs, but business owners (ent. D, F, N). One of them, providing human resource consulting services, additionally used the term, “solo-preneur” (ent. N). This dissonance in identity critically affects how they search for local support resources and whether they become integrated within the entrepreneurial community. One woman entrepreneur simply described that “[when I hear] ‘resources for entrepreneurs’, and I’m like, sometimes I don’t know if I fall into that category for what’s being offered” (ent. P).

In addition to cognitive dissonance experienced in the quotations above, the term “entrepreneur” was also interpreted to mean someone who is in certain industries, such as tech and biotech sectors, has already achieved a high degree of success, or has received investment from venture capitalists. Being in a different sector or not pursuing equity capital, women entrepreneurs considered themselves as business owners or self-employed, but not “entrepreneurs.” This was in sharp contrast to male entrepreneurs we interviewed, who did not express second thoughts about assuming the title “entrepreneur.”

At the same time, these differences did not signify that women entrepreneurs were unsuccessful in business or lacked entrepreneurial intentions. Women entrepreneurs expressed the same desire for growth of their businesses as men entrepreneurs. The most common reason (22 out of 35) that women entrepreneurs expressed for starting companies was seeing a unique opportunity for tapping unfulfilled demand, which is the same rationale expressed by founders of high-growth companies (Bhide, 2000; Desai and Motoyama, 2015). Other reasons for starting companies were pursuing a dream (seven cases), better flexibility (six cases), and being tired of the corporate career track (five cases).

With regard to sectors, some specifically targeted women or the market oriented to women, such as fashion (three companies) and interior design (one company), but the areas that women entrepreneurs operated in are diverse and not specifically targeting women (see also Table 3). Many women entrepreneurs we interviewed operate in traditionally masculine sectors, such as tech and biotech: medical imaging technology, medical device, health software, web services, civil engineering, and aviation and equipment manufacturing. However, the way that each company positions its market niche within a sub-sector is so distinct that women entrepreneurs we interviewed did not always formally express that they are operating within or conducting business in a masculine sector.

Feeling general unfit

The detachment experienced by women entrepreneurs was shaped not only by the linguistic terminology but also by a broader feeling of being excluded. Both men and women reported a culture of an “old boys” club with local entrepreneurship events and programs. While one woman expressed that “It’s still a boys’ club… . It’s just the way it is” (ent. K), another woman further analyzed that the entrepreneurship scene in St. Louis “need[s] improvement for women in entrepreneurship, [because] it’s still mostly men” (ent. Q). The latter woman continued to describe that three local major organizations and their events “have always been notorious for having hardly any women there” and one of them in particular she felt had a “patriarchal feel” (ent. Q).

In addition to expressing an exclusive, masculine and non-welcoming atmosphere, in some cases, women also found that entrepreneurial events were not accommodating them logistically because most happy hour or networking events are scheduled around five or six o’clock and thus conflicting with their household. responsibilities (ent. A). One woman cannot usually attend networking events because her husband coaches children’s sport teams, but she occasionally manages, describing her frustration that “you have no idea what I had to go through to get to this networking event” (ent. H).

In addition, women felt some popular or ice-breaking activities at entrepreneurial events are oriented to a specific demography of entrepreneurs. While men entrepreneurs found those events and programs incredibly friendly and open, women entrepreneurs perceived an invisible barrier or an uninviting culture. As one woman described a networking event held at an incubator: “They’re playing video games together and talking about sports. I don’t care about any of those things, and I just don’t fit in there…. It’s uncomfortable and it is frustrating” (ent. U).

Feeling rejected

In addition to subtle manifestations of exclusion, in some cases, women entrepreneurs articulated a direct experience of being rejected and experiencing microaggressions directed at them, which they attribute to their gender, such as being “treated like strangers” (ent. B), or even “a crazed feminist” (ent. K). One woman shared her frustration about an entrepreneurial program:

I don’t know if it’s because I’m a woman, I don’t know if it’s because I’m not there all the time, and I’m the only one there that’s a parent and has got all these other things going on. I don’t know if these people just don’t understand me; I don’t know what it is. There are certain people that will go out of their way to not make eye contact with me so they don’t have to say hi to me. It’s that weird. (ent. U)

Similarly, another woman experienced at a different event: “immediately this person - you know how you can get the vibe of somebody - pretty much initially, he was like ‘Oh I don’t think she’s got much to offer me’” (ent. E).

In addition to a general feeling of exclusion or rejection in the community in the form of subtle challenges to their fit, belonging and/or competence as entrepreneurs, women interviewed felt that many supports were not helpful or well suited to them. Further, the delivery, design, and/or communication of programming were experienced as being condescending or demeaning. The observed common pattern is that women entrepreneurs felt that support organizations or mentors questioned the abilities of women as entrepreneurs, or they had to prove their abilities before they would be seen as worthy of time, resources, and investment. “It’s very interesting to me to see how dumbed down resources can be for groups that are strictly targeting minorities or women. To me, sometimes it feels like it’s not the same level of information or seriousness” (ent. T). This is corroborated from the view of support organizations as they perceive the need to provide programs and events at an elementary level because they believe that women entrepreneurs have little background in entrepreneurship, and they had to start from the basics (s.o.F, s.o.G, s.o.H, s.o.I).

One woman who had a mentor from an organization not specifically targeting women described that when her company did not meet the sales target, her male mentor’s response was that

Well, I don’t know what’s so difficult. You hire a sales force, you hire twenty people, to make phone calls, 20 people can make 400 calls a day, you know, times 3 months. Well, there you go. You’re in every plant in the country!

However, the woman entrepreneur had a completely different response: “I thought, it [my business] doesn’t work like that! … Some of them [male mentors] didn’t want to take the time to understand why this is important or really understand the product, so they were giving out very general advice” (ent. W). Alternatively, a different woman summarized that “people [in the mainstream] assume that what you [as a woman entrepreneur] know and what you don’t know” (ent. H). These experiences as a whole suggest that the St. Louis’ entrepreneurial ecosystem, while it has made strides in giving attention and resources to support women’s entrepreneurship, still has work to be done before it is fully supportive and inclusive.

Discussion

Importance of the social dimension

In response to our research questions, which asked whether entrepreneurial networks in St. Louis are disconnected between women and men entrepreneurs, and why, our interviews demonstrate a clear gender gap, as well as the structural reasons, within the local entrepreneurial community. Many women entrepreneurs are not aware of local resources or support organizations, which forms an isolation based on gender as an organizing principle within the region. Other women entrepreneurs are aware of the resources, but decided to opt out due to cognitive dissonance, the experience of invisible barriers, and lack of inclusiveness, or the feeling of rejection with the mainstream entrepreneurial community.

As past studies suggest, the core of an entrepreneurship ecosystem is entrepreneurs, as people and critical actors. However, our understanding has been limited about how gender forms structural barriers between actors within a local system. If people make a local system, people-based divisions will also affect their behavior and the system, as well as sub-systems. In theory, the system is “one for all and all for one” (Feldman and Francis, 2006). That is, our theories of economic development and entrepreneurship assume all actors are treated equally according to (economic) merit. Yet, the reality is that much of the system functions well for the dominant group, but not for those who have not been fully included and integrated.

“Man is by nature a social animal” (Aristotle, n.d.). This observation at the individual level brings in far more complex dynamics at the group level. Men entrepreneurs are social animals, and so are women entrepreneurs. Entrepreneurs are (important) economic agents, but their social nature can precede economic behavior. This is because entrepreneurship is a highly individualized activity, and it involves great financial risk, self-direction, and creating one’s own path. Given taking risks, stepping out on one's own, seeking help and interacting with others are emotional as well as economic activities, and support by the entrepreneurship community includes social and emotional dimensions. However, such social and emotional support may not easily transcend across different social groups. If men and women are not equally comfortable with the same extant forums, practices, cultures, vocabularies, or even share the same identity as “entrepreneurs”, they will not equally benefit from the resources and support available. Thus, if the core of the system is individually based but socially determined, we ought to understand the dynamics between individuals and social dimensions.

While the embeddedness of these social and economic dimensions is clearly observed (for example in Granovetter, 1985), our study further reveals that the social dimension can precede the economic dimension of entrepreneurs’ experiences. It certainly is appealing economically if an entrepreneur can receive millions of dollars of equity investment. However, if women entrepreneurs accurately perceive the social division between themselves and investors or other masculine men entrepreneurs, they may rationally not pursue such economic gain given the biases embedded in the system and their resultant much lower odds of attaining it.

Our findings further indicate that the linkages between actors are not neutral, rational, merit based, and purely economic or financial. In contrast, entrepreneurs as people organize their activities based on social settings. Economic transactions or information exchange does not take place seamlessly within a region, but rather is constructed and organized according to social networks and social conventions and organizing principles, including gender. We have to underscore here that gender and social networks are not the same thing. While people’s social networks can be developed through gender lines, social networks can also be divided based on gender.

To summarize so far, we have found that the divisions within an entrepreneurship ecosystem comes from two structural reasons. First, there is little overlap between networks of women entrepreneurs and men entrepreneurs. The networks do not grow based on a sheer quantitative way, and the growth of networks among men entrepreneurs and support organizations in recent years in St. Louis was not reflected to growth of networks for women entrepreneurs. Second, women entrepreneurs opt out to get into the so-called mainstream entrepreneurship ecosystem because such ecosystem is constructed around men entrepreneurs, and women entrepreneurs find little compatibility.

Proactively target women

While deeply held social norms and cognitive biases are challenging to change in short periods of time, we here discuss potential changes, interventions, and solutions for moving the needle. First, leaders of support organizations and local event planners can intentionally improve their performance in informing women about the resources and inviting them intentionally into the community. This would lead to better access and increased connectivity within the region. However, this approach is challenging, as first-time entrepreneurs have a hard time getting connected to networks when “what you don’t know is what you don’t know.” The gap between zero and one is enormous in which zero connection leads to nowhere, but one connection may open up many more possibilities. They are struggling and busy with their daily operations, and simply cannot spare more time for identifying unknown networking activities. However, targeted communication and expression of the value gained by connecting with the entrepreneurial community with diligence in execution can overcome this challenge.

Ineffective outreach and recruitment

Second, we find that the standard “open door” policy is not a sufficient practice for recruitment. Even in today’s digital age, entrepreneurs find resources via word of mouth (Motoyama et al., 2014), and our interviews reveal the same pattern. Here, support organizations will be the key players for this recruitment, but their typical recruitment strategies are like this: “Yeah, we haven’t really [advertised], the word seems to be out. I think people are drawn to us” (s.o.F); “We have a very organic, grassroots communication plan” (s.o.C). In other words, people who participated in programs at support organizations spread the words and recruited more, but only within their homogeneous network.

At the same time, these support organizations equated a lack of strategic advertising as an indicator of their success. Thus, they did not question the status quo outreach strategies as being problematic for inclusion. However, due to homophily and homogenous networks, relying on word-of-mouth advertising techniques will grow a community by bringing in other people similar to those already in the network – which in this case is more white male entrepreneurs. Some support organizations started to admit that something is not working with that strategy: “It’s just hard to include women. We are gender neutral, and our doors are open, but it’s just hard” (s.o.F). These passive, open door and gender-neutral (versus gender aware) strategies are not sufficient, because the notion “all are welcome” ends up with “all who we know are welcome.” Because of this structural reason, the web-based advertisement or social media blast for the inclusion initiative will only go through people who are already in the network and their connections. Thus, it is unlikely to cultivate the awareness and interest of new kinds of groups outside of existing actors and participants and those like them.

Listen to women entrepreneurs

Women entrepreneurs may opt out, reject, or be rejected either intentionally and overtly or unintentionally and subtly. Despite having an awareness of resources and programs, this division based on prior negative experiences brings a whole set of new issues, leading to our third implication. For the recruiting side, doing more of what they have been doing, for instance cultivating networks of men entrepreneurs in the IT sector, is not the answer. It requires a fundamental revisiting of operations, communication and recruitment methods. An important strategy is to bring in the perspectives of the people they want to recruit. If the inclusion initiative targets women, they need to identify and talk to women entrepreneurs. We observed that, while the underrepresentation of women is apparent, there are still some women entrepreneurs participating in various entrepreneurial events or programs. Our communication with support organizations reveals that those organizations in a lower percentage of women still have women as 20% of participants. Our field observation equally demonstrates that a small number of women, sometimes less than 10%, are present in entrepreneurial events. It is important to directly ask women entrepreneurs what they want to learn, what their experiences at events and in meetings are like, and to tailor programs or events for them, instead of expanding the past program for men entrepreneurs and relabeling it as being for women entrepreneurs.

Increase women’s representation in leadership and operations

In addition, support organizations can incorporate broader and more inclusive perspectives by ensuring adequate representation of women in leadership positions. The process of talking to women then should be better integrated with their daily operations, because women entrepreneurs are more likely to be drawn to events both led and run by other women. Women express feeling condescended to when organizations with predominantly male leaders launch programming for women entrepreneurs run by male staff. In addition, representation and full incorporation of women is necessary among supporters of the local system, such as mentors, guest speakers, and judges for business plan competitions. An “all hands on deck” approach is needed to effectively signal commitment to full inclusion. This may require training and many conversations to assess and redress stereotypical and harmful reservations, assumptions, beliefs, and attitudes towards women as entrepreneurs. As we are finding a cognitive dissonance of women not identifying as “entrepreneurs”, it is important that these women in leadership positions or mentors also educate women and men that the goal of the region and support system is not to generate a star “entrepreneur”, but to create a more inclusive system that can host broader kinds of successful business and civic leaders, including those that more comfortably identify themselves as “business owners” an “self-employed.”

Engage in gender aware outreach

We find a couple of innovative marketing approaches are being implemented. While the conventional entrepreneurial channels may enhance the homophily of white men entrepreneurs, other channels, such as public radio, are not dominated by a specific demographic group and can reach a wider audience than those who already consider themselves entrepreneurs (s.o.D). Another example was a symposium focused exclusively on increasing diversity (gender, race, and industry) run by three support organizations. To reach those demographics, the organizers coordinated outreach with local chapters of affinity groups, such as the Society of Black Engineers and the National Society of Women MBAs. However, we have to note that these cases are exceptions.

Keep pushing inclusiveness and adapt to variation in demands

In addition, while the creation of a women-specific entrepreneurial group was an important step that is welcomed by many women entrepreneurs in the area, other women entrepreneurs relay the need to improve inclusiveness in the ecosystem. Some women entrepreneurs expressed issues about how meetings are organized, frequency of meetings, the kinds of sub-groups that exist or do not exist, and concerns about variance in what people need and receive from their groups (ent. B, C, D, I, K, Q). These issues are not unexpected, and a newly created sub-system does not need to function perfectly, because there are different demands and supports for different kinds and stages of women entrepreneurs; for instance, startup entrepreneurs versus entrepreneurs who are aiming for a further scale up after a few years. An ecosystem, or even a sub-ecosystem, must evolve over time to different stages to be responsive to a variety of demands.

It is easy to use the term “ecosystem” in a neutral and abstract sense; yet, entrepreneurship involves complex human motivations, expressions, and needs that raise nuanced experiences and explanations for variance in entrepreneurial outcomes. The ecosystem should not exist for a single and mainstream subset of a population, but for all kinds of groups, including women, minorities, people of color, immigrants, and differently abled entrepreneurs. The system must evolve to accommodate diverse groups, or it will start to create different systems even within the same locale. This can happen not only between men and women entrepreneurs but also between early-stage and experienced women entrepreneurs. Further, support institutions and businesses comprised largely of homogeneous actors that do not move forward with intention on becoming more diverse, inclusive and equitable threaten to perpetuate demographic gaps in who becomes a successful entrepreneur.

Implications for race-based divisions

While the structural divisions we observed in this research are gender-based, there can be implications for other socially based divisions related to economic development activities. Notably, scholars are starting to find similar underperformance among professional service firms owned by African American entrepreneurs (Harper-Anderson, 2019). The race-based divisions may have a parallel structure with the gender-based divisions, as African American entrepreneurs may not identify themselves as entrepreneurs, but business owners, and opt out of support services if they find a lack of fit. For example, Harper-Anderson (2019) reported poor cultural fit and a contentious business environment. We need to further cultivate understanding of this complicated web of networks, ecosystems, and divisions and how this disadvantages African American entrepreneurs relative to white entrepreneurs.

Concluding remarks

In summary, our research suggests many improvements are in order for leaders and decision makers in St. Louis’s entrepreneurial ecosystem. Female entrepreneurs continue to express unmet needs, difficulty obtaining resources including mentorship and support, and challenges establishing their entrepreneurial identities and networks. While there are some occasional, segregated events for women, they may function to marginalize them from the resources they need, and there needs to be an improvement of the male dominated and historically male designed (what is viewed as “mainstream”) programming for all to be more inclusive and attentive to the unique challenges women face in launching and growing their ventures. Further, leaders play a role in mentoring entrepreneurs, aiding with identity formation, building their networks, and providing critical mentors, advocates, allies, and partners. Historically and presently, women have not been sufficiently resourced, mentored, included and advocated for as they attempt to launch, grow, and sustain their businesses. These improvements will be critical for fostering inclusive economic development through entrepreneurship. Public representatives and policy makers can encourage inclusive development by educating leaders of entrepreneurship, champions, and support organizations, and by holding publicly funded and subsidized agencies, business centers, incubators, and other resource providers accountable for gender equity in their outreach, programming, delivery of services, and provision of resources.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This project was partially funded by a grant from the Ewing Marion Kauffman Foundation.

ORCID iDs

Yasuyuki Motoyama

Banu Ozkazanc-Pan

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