The COVID-19 gender gap: How the crisis has created a new avenue for entrepreneurs

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The global pandemic has added pressure on the global economy as well as the careers of many working women. But it may also have a silver lining: Persuading them to become their own bosses.

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Women and Work, part 2 of a 4-part series.

In 2020, Charlene Walters, a single mom with two kids, decided she wanted more flexibility with her work life. Having launched a digital entrepreneurship MBA program, Walters loved the “hustle”—and decided to take a risk and work for herself, becoming a coach for budding entrepreneurs. The author of “Launch Your Inner Entrepreneur: 10 Mindset Shifts for Women to Take Action, Unleash Creativity,” Walters mentors other women who are choosing this path.

Now during COVID-19, Walters has been kept especially busy.

As the global pandemic has translated into massive unemployment and general workplace anxiety for many American workers, one group that seems to face the steepest challenges: Working women. Since March 2020, nearly 2.5 million women have been forced out of their jobs, versus 1.8 million men, according to U.S. Department of Labor data. And not only have women been cut out of the labor market in greater numbers, but they are on the losing end in job recovery, as well: In December 2020, American women lost 156,000 jobs, while men gained 16,000.

Women are vastly overrepresented in lower-paying work, which has been negatively impacted by COVID-19 as public health concerns have shuttered brick and mortar stores and restaurants, and kept many indoors. But even for women in jobs like tech—where flexibility and remote work has been at least on the table pre-pandemic—women are struggling. Even though 95% of women in technology say they have been working from home at least part time since last March, recent reporting from TechRepublic shows that half of the women responding to a survey believe the pandemic has hurt them professionally.

SEE: The COVID-19 gender gap: How the global pandemic has forced women out of the workforce in droves (TechRepublic)

With all this grim news, there is a silver lining, however: Many women are using this time to ditch traditional employment and become entrepreneurs or self-employed.

According to the U.S. Census Bureau, applications for new businesses have spiked—since mid-December, they are up 82% from a year ago. The Washington Post recently reported that, in looking at data from LinkedIn, which tracked the change in women’s titles to “founder,” this cohort grew 5% year-over-year since March, which is twice what it was pre-COVID.

One other potential indicator that women are launching more businesses than men is printing demand—for logos, signs, etc. One U.K. print shop shares this: “Based on the analysis of hundreds of print orders received from start-up businesses between 1st April – 1st September 2020, we found that an incredible 78% were from female customers. What’s more, almost 90% of those orders required design support, suggesting that many women are creating and launching a brand for the first time.”

Taking a chance

Walters believes that the pressures women are facing during COVID-19, which has often meant taking on new roles as educators and caretakers, is a big part of the trend of layoffs and resignations of women. “Many of those women left because they were stressed with work-life balances,” Walters said. “Some left because they weren’t getting the right opportunities.”

Walters sees women using the circumstances they find themselves in during the pandemic to boost their businesses or to launch a new career. 

In her own career, Walters helps women overcome some of the barriers to entrepreneurship.

“Women generally have some issues related to confidence,” Walters said, adding, they have trouble putting themselves front and center. “This is a mindset adjustment we need to get over.” 

When it comes to gaining funding, in particular—critical for those launching startups—women “tend to have a more difficult time cultivating their financial confidence, so they won’t get as many funding opportunities as men.”

Although 42% of businesses are owned by women, Walters explained, women, by and large, tend to ask for less money. “They need help with pitching, presenting themselves, cultivating a money mindset.”

SEE: COVID-19 workplace policy (TechRepublic Premium)

Abbie Sheridan, a New York-based PR specialist, was finishing up maternity leave and had to return to the office the week after COVID-19 hit the U.S.

“I wanted to take some time to spend with my then newborn son,” Sheridan said. She turned to freelance work, launching her own PR company called Greenrose Communications, and expected that this would be a short-term solution until she found a more traditional job.

Going solo was an adjustment, at first—certain tasks took longer, and she had to deal with extra steps like bringing on a lawyer and accountant.

Working for herself also required a mental shift; she would need to set limits on how much she worked, in order to avoid burnout. “If you are workaholic like me, going out on your own will be harder for you since you’ll feel like you should be working 24×7,” Sheridan said. “Especially with COVID and everyone working from home, it’s very hard to disconnect. Try to take some time for yourself whenever possible (something I am still struggling with) and have a designated workspace.”

Sheridan hustled to get work, using her social media and in-person networks to find clients. In the end, she’s had to trust her gut and her advice for others: Don’t feel like you have to take on everything that comes your way.

Six months after Sheridan began freelancing, the search for full-time work ended. “I haven’t looked back.”

New opportunities

Women interested in becoming entrepreneurs may have another advantage during COVID-19—as the workforce has become more remote, Silicon Valley’s grip on VC capital may be loosening, which means there may be more room for those who have traditionally not been invited to the club.

Joseph Heller, whose company Supplied helps minorities connect to top-rated global manufacturers, is intent on helping those from outside the “inner circle” gain access to resources and mentorship.

He also sees COVID-19 as an opportunity for women and minorities, “mainly because VCs are being forced out of Silicon Valley.” Also, because people can work from home.

And it seems to be fortuitous timing, as well. “I’ve seen a ton of female-run businesses being launched during COVID because they lost their jobs, or they’re forced to take care of kids at home,” Heller said.

His interest in helping women and minorities is personal. As a Black man who needed funding for his new business, Heller says he was “very surprised” to find the VC meetings “full of white males.” While he says he didn’t experience overt racism, the closed network made his mission to find investors difficult. Heller, who arrived with a sizable revenue—by 2016, he had $10M in annual revenue—pitched 150 VCs. From the 120 white VCs, “we got zero term sheets.” 

From the 30 nonwhite VCs, he got five. “It was a stark contrast,” he said.

“It raised an alarm bell,” he said. VCs are “inundated with people who want their capital,” he explained, which meant that “it’s much easier to say yes to someone who looks like them.”

Today, Heller says, there’s an advantage to removing the physical setting that many of these VCs used to conduct business in. “Since everyone’s behind Zoom, there’s going to be less of the fraternity environment,” Heller said.  

While launching a business may be appealing for women, who have felt added pressures since COVID-19 and are more likely to take a risk, it does not mean that female-owned businesses started pre-pandemic have not struggled. In fact, a 2020 study published in the International Small Business Journal shows that “women-owned businesses [are] typically more vulnerable to economic impacts,” and that women apply for more in loans during crises, but end up receiving less than men.

Still, for those who are willing to take a chance, now may the time. “COVID, long-term, may help out,” Heller said.

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