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Bad Girl Ventures, Bad Girl Ventures
Candace Klein speaks to local entrepreneurs in Salt Lake City last month.
It absolutely is harder for women in business. —Marian Rivkind, president and CEO of Yolka Chocolates

SALT LAKE CITY — Candace Klein is an Ohio-based entrepreneur who has won more than 14 business competitions.

Though Klein has been able to enjoy a fair amount of success, it has not been without challenges.

Having started out as a corporate and securities lawyer in 2008, she saw firsthand the difficulties facing women entrepreneurs and business owners.

Most of her clients were start-ups and banks, she said, and one of the main themes she heard and experienced herself was how tough it was to obtain funding.

"In 2008, the economy fell apart, and my start-up clients were telling me they couldn’t get financing and they were going to have to close their doors," said Klein, a featured speaker during a recent mentor and strategy session targeting female entrepreneurs in Salt Lake City.

Upon seeing the potentially devastating impacts, she became obsessed with finding alternative financing options for her clients and others in similar circumstances "to try to find a way to get money into the hands of my legal clients.”

Klein studied the various kinds of alternative options and eventually launched her own resource firm called Bad Girl Ventures, a nonprofit micro-finance company that invests in women-owned businesses and start-ups.

"The company was just born out of a need I found in my law practice," she explained.

Klein also founded SoMoLend, a technology platform that connects business borrowers seeking loans with lenders looking to make a return on investment. In Utah, SoMoLend has partnered with KeyBank — which is lending a minimum of $50 million.

"The No. 1 challenge to start with was finding financing, (and) continues to be one," said Marian Rivkind, president and CEO of Yolka Chocolates of Salt Lake City.

The 33-year old working mother and wife initially worked in marketing, then started a hairstyling business before launching her latest venture — an ornamental chocolate producer.

Rivkind described the concern of obtaining adequate funding and running a full-time home-based business as "a constant struggle."

Citing an experience she had at a local bank where a male banker referred to her as "the hairstylist mom," she said, "I knew that it was all about (being a woman) and not what my capabilities are."

Rivkind said that being a woman has definitely added to the challenge of being an entrepreneur.

"It absolutely is harder for women in business,” she said.

While many women have found accessing resources difficult, Pam Schulte, founder of Lucky Spoon Bakery — a purveyor of gluten free products, said her experience has been quite different.

"If anything, there seem to be more opportunity," Schulte said. "People want to support businesses owned by women."

She noted the numerous entities dedicated to aiding in the development and financial viability of women owned firms, such as Bad Girl Ventures.

According to the Women's Funding Network, females make up half of the professional workforce. Fortune 500 companies with a higher percentage of women officers enjoy an average of a 35 percent higher return on equity and a 35 percent higher total return to shareholders than companies with a low percentage of women in corporate office, a Women's Funding Network report stated.

The number of women entrepreneurs is also growing. Over the past decade, the number of women-owned start-ups has increased twice as fast as the number owned by men. Today one in four businesses are owned by women.

Despite those statistics, women receive only 5 percent of financial capital, Klein said. The Women's Funding Network contends that if women entrepreneurs had access to the same amount of capital as male entrepreneurs, they would add 2 million jobs to the economy in just one year and 6 million over the course of five years. 

In the U.S., the amount of private, women-owned companies has increased twice as fast as those owned by men, and women-owned businesses have created or maintained 16 percent of all jobs and generated over $2 trillion in revenue, the report stated.

"In 2010, 62 percent of the business owners looking for financing were male, compared to 38 percent female," said Brock Blake, CEO of South Jordan-based funding facilitator Lendio. "Now (in 2012), only 52 percent of the business owners looking for financing are male, compared to 48 percent female."

According to an October 2010 report from the U.S. Department of Commerce Economic and Statistics Administration, women constituted almost half of the employed population in 2008 but are under-represented among business owners.

Furthermore, privately held women-owned businesses are substantially smaller than men-owned businesses, whether measured by average sales/receipts or employment. Although they have been growing faster, women-owned businesses still lag behind men-owned businesses, the report stated.

In 2007, 7.8 million companies were owned by women — nearly 30 percent of all non-farm, privately-held U.S. firms. Women-owned firms had sales receipts of $1.2 trillion and those with paid employees had 7.6 million workers.

From 1997 to 2007, the number of women-owned businesses rose by 44 percent — twice as fast as men-owned firms — and added around 500,000 jobs, while other privately held firms lost jobs.

The report said the reason, in part, was because women-owned firms were more likely to be located in industry sectors that experienced employment growth, such as health care and education services.

During the five-year period from 1997 to 2002, the number of businesses owned by minority women increased faster than those owned by non-minority women, with minority women-owned firms accounting for more than half of the increase in women-owned businesses.

Because women-owned businesses are typically smaller than their male-owned counterparts, even though women own 30 percent of all privately held businesses, those businesses account for only 11 percent of sales and 13 percent of employment among privately held companies.

Additionally, average sales receipts for women-owned businesses are just one quarter of the average sales receipts for men-owned businesses.

The report also stated that there were substantial differences in the financing utilized by women-owned versus men-owned businesses. For instance, women start with less capital than men and are less likely to take on additional debt to expand their businesses. They are also more likely than men to indicate that they do not need any financing to start their business — case in point, Shulte's bakery, which she said was "completely self funded."

"It is difficult to distinguish preferences from constraints in these data," the report states. "Women may encounter less favorable loan conditions than men or they may be less willing to take on risk by seeking outside capital."

The characteristics of self-employed women are similar to those of self-employed men. While compared with non-self-employed workers, self-employed women and men are typically older, more likely to be married and less likely to have children at home. However, women who are self-employed work fewer hours on average in their business than self-employed men, according to the report.

The annual earnings ratio between self-employed women and men is 55 percent — well below the ratio between non-self-employed women and men. 

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According to the Utah Division of Corporations, since Utah passed a law five years ago allowing women-owned businesses to voluntarily designate themselves as such, the total number of businesses to register in that category to date is 4,284.

How fruitful a new business will be long term depends on a number of factors, Rivkind said. But she added that determination, preparation and knowledge will be keys to giving any new business owner — male or female — the best chance for achievement.

"Focus on your goals," Rivkind said. "If you understand your product, the marketplace and where you think you're going to have the most success, just move forward."

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