Last month marked a quarter-century milestone for entrepreneurship policy that few entrepreneurs were likely aware of, let alone celebrated. On Oct. 25, 1988, President Ronald Reagan signed the Women’s Business Ownership Act. The law, designated H.R. 5050 for the equality it set out to establish for female entrepreneurs, banned discrimination against women seeking business loans and improved access to educational and technical assistance.
It’s hard for someone like 25-year-old Tish Scolnik, an MIT-trained engineer and startup founder, to wrap her head around. But in the year she was born, banks in some parts of the country still required women to have their husbands or other male relatives co-sign their loan applications, no matter how creditworthy they were.
“I can’t even imagine that legislation like that was needed,” says Scolnik, who founded Boston-based GRIT in 2011 to design and produce rough-terrain wheelchairs. Her three-employee company won $100,000 in the 2013 MassChallenge, a startup competition. Of the 128 companies that entered this year, 35 percent were founded by women, including eight of the top 26 finalists.
But for 69-year-old Carol Stein, who founded Nashville’s Cumberland Gallery in 1980, the need isn’t so far-fetched. She remembers having to get her husband’s signature on all the legal documents related to her business. She also hasn’t forgotten the landlord who told her he wouldn’t rent space to a woman starting a business.
“He also turned down two women who ended up opening a bookstore that turned into a nationally known concern. I bumped into him five or six years ago, and he admitted those were the biggest mistakes he had made in his career. That was very gratifying,” Stein says.
Despite the gains that the legislation, and the women’s movement that sparked it, have brought about over the past quarter-century, women have not achieved anything close to true equality in business, says Caryl Rivers, co-author of The New Soft War on Women (Penguin Group 2013). The book argues that although women made tremendous strides through the 1990s, they have been stuck or falling behind ever since in such areas as equal pay and business ownership. It cites research that shows men are almost twice as likely as women to become chief executives or senior executives and are paid less even when they do reach the C-suite.
Celebrating women’s achievements is fine, but focusing on the good without seeing the persistent disparities can be misleading, she says. “When women buy this stuff and start looking at how well they’ve done, they start putting on rose-colored glasses and thinking things are much better than they are. This narrative tends to make the barriers invisible and make women think that if they’re not doing as well as they should, it’s their own fault.”
Indeed, rather than tackling problems such as stubborn pay gaps or the dearth of venture capital for women-owned companies, many women who start businesses worry more about their own shortcomings, echoing Facebook (FB) CEO Sheryl Sandberg’s advice that women should “lean in.”
Sarah Biller, 42, president of financial technology company Capital Market Exchange, cites perfectionism as a major challenge for women, including herself. “I wanted to come to market with a perfect solution,” she says. But “it’s a messy world.” That “tendency to play by the rules and dot every ‘i’ or cross every ‘t’ stands in the way of women all the time,” she says.
Part of that overcompensation may come from knowing, consciously or unconsciously, than women have to outperform men to succeed, she says. “When I’m meeting with peers who are often all men, I sit at the table fully prepared for the discussion, but I see a lot of guys just winging it.”
Andrea Colaco, 27, is the founder of 3dim, a four-employee startup that is developing mobile technology that will allow users to control their electronic devices with independent hand gestures rather than keystrokes or physical swipes on the device. She co-founded the company as an MIT doctoral student in engineering and says that despite her expertise, she finds she is sometimes overlooked in conversations, especially when her male counterparts are discussing a technical problem. “It does happen often, but it might be because I am more hesitant to ask questions, and it takes me longer to get the attention of the speaker,” she says.
Scolnik also identifies communication as a stumbling block, saying she struggles to speak confidently about her wheelchair company when progress is not being made as fast as she’d hoped. “I find myself using the royal we even when I’m talking about something I did on my own. I always want to make sure everybody gets the credit,” she says.
That tendency toward modesty and emphasis on being a team player does hurt women, Rivers says, especially since men are already more likely to be handed credit—and to take it—for achievements made by a group. “The accomplishment is automatically seen as the guy’s, so if women don’t speak up, they risk losing out.”
Despite women’s ongoing struggles, they are making progress, particularly in gaining a voice in decision-making at the highest levels, says Barbara Kasoff, president and co-founder of WIPP (Women Impacting Public Policy), a nonprofit that advocates on behalf of 4.7 million businesswomen and 75 women’s business organizations. “Are we where we should be at this time? No. There are still issues, like not enough women in senior management or on corporate boards.”
To counter that, she says, “there’s a very clear realization that women entrepreneurs fuel the economy and have a strong economic impact. We are unquestionably now at the table for every important economic decision, and that’s a critical outcome.”