Investing in women is not only the right thing to do, it is the smart thing to do Ban Ki-Moon, Secretary General

of the United Nations, International Women s Day in 2008. The crux of the argument to invest in women is the Women/Girl Effect or the Multiplier Effect of investing in women. The key here is that investing in a woman will have returns for her family, community and across the globe. At the household level, this effect is propelled by the different spending priorities of women and their propensity to save more: Spending priorities Though an increase in either women s or men s income helps children, the benefits are greater when women are the source of the increase. Women s spending priorities are different than men s, with women notably more likely to buy goods and services that improve the family s welfare. Purchases become increasingly directed toward the health, education and welfare of the household. Household surveys show that an increase in the share of assets held by women in urban households increases the share of the budget spent on food. Among both rural and urban women, the share of assets held by women has positive effect on spending on education and a negative effect on expenditures on alcohol, tobacco and recreation. (Goldman Sachs) When women and girls earn income, they reinvest 90% of it into their families, as compared to only 30 or 40% for a man (The State of the World s Children) Spotlight: In Brazil, child survival rates increase by about 20% when income is in the hands of the mother. (The World Bank and Gender Equality) Pensions received by women translate into better nutrition for girls while pensions received by men have no such effect for girls or boys. Child nutrition is better in households run by women compared to those run by men, even when the women s families are poorer. Income managed by women has a five-fold impact on food expenditures (compared to when it is managed by men) and women tend to invest in food associated with better health (Goldman Sachs) Note: This matters in the US too: The number of children living in poverty in the U.S. is 15.4 million from 14 million in 2008 a 10 percent increase in 2 years(WFN Factsheet) Savings Household savings rates generally rise when income is in the hands of the woman, augmenting the savings available to finance future growth. Women tend to save more than men do, which may be attributable to their greater economic vulnerability. Information from 20 semi-industrialized countries suggests that for every one percentage point increase in the share of household income generated by women, aggregate domestic savings increase by roughly 15bp. And a one percentage point increase in women s share of household wages boosts aggregate savings by 25bp (Goldman Sachs). CONTRAST DATA: WOMEN S POVERTY AND EMPLOYMENT STATS Macroeconomic case

The long-run macroeconomic affect of closing the gender gap is an improvement in human capital and thus the labor productivity of a society. From a competitiveness perspective, women s disproportionately low participation in the workforce and exclusion from employment can reduce the pool of applicants, distort the allocation of talent and the productivity of human capital, and thereby reduce the average productivity of the labor force. Reducing inequalities in education and job access can stimulate economy wide growth In short, countries that do not fully capitalize on one-half of their human resources run the risk of undermining their competitive potential. (Simavi) Under-investing in women limits economic growth and slows down poverty reduction, which is one reason that countries with greater gender equality tend to have lower poverty rates. A direct link can be made between increased female labor participation and growth for both developed and developing countries. United Nations estimates that if women's paid employment rates were to equal men's, U.S. GDP would increase by 9% and the Euro Zone s GDP would increase by 13%. In Africa, limited education and employment opportunities for women reduce annual per capita growth by 0 .8%. Had this growth taken place, Africa s economies would have doubled over the past 30 years. (International Women s Day) The Asia-Pacific region is losing $42-$47 billion annually as a result on restrictions on women s access to employment opportunities, and another $16-$30 billion per year because of gender gaps in education, according to the Economic and Social Commission for Asia and the Pacific. (International Women s Day) Gender Lens Statistics 1. Access to Capital The Need Women in Africa receive less than 10% of all credit going to small farmers and 1% of the total credit going to the agricultural sector, even though they comprise the majority of agricultural workers.(The World Bank and Gender Equality) Today, about 25% of the top 100 entrepreneurs are women, yet less than 2.5% of a total of 3.5billion pounds of VC funding in the UK and Europe is going to companies with a female CEO. In America, only 5.7% of a total of over $20billion of VC funding goes to companies with female CEOs. (Padnos) And, while women own nearly one-third of all businesses in the United States, women-owned businesses received only 3.4% of federal contracts in 2008.i (WFN Factsheet) In general, access to capital is a much greater challenge for women than it is for men. For example, only about 4 percent of venture capital money flows into women-owned businesses, although women own one-third of the total. (NCRW Women in Fund Management) The Opportunity The success of microcredit throughout the world attests to women s loan re-payment performance. The most well-known microcredit institution, Grameen Bank in Bangladesh serves a 97% female client base and boasts a 97.24% loan recovery rate. Another example of women s loan repayment performance

is Nigeria s Morgan Smart Development Foundation s Community Bank, where they have given loans to over 15,000 women and boast a repayment rate over 85%. Studies show that companies built by women are more capital-efficient than those founded by men, using less capital to achieve the same or higher revenue performance in the early-stage years. The Kauffman Foundation s research shows that women-led high tech companies typically launch with capital at levels 30%-50% less than those by men. Library House Ltd. Research of 600 European venturebacked companies in 2007 found that those run by female chief executives delivered higher revenues using less capital than those headed by men. The average venture-backed company run by a women had annual revenues that were 12% higher than those run by men using, on average, one third less committed capital.In the United States, businesses owned by women have a two year success rate of 80%, well over the national average of 50%. A joint project of the Center for Women s leadership at Babson College and the London Business School showed that women achieved a higher ratio of transition to established businesses- experiencing fewer failures in moving from early to growth-stage companies than men.(Padnos)

Women are starting their own businesses in the United States at twice the rate of men.ii However, only 1% of single Hispanic women and 4% of single black women own business assets compared to 8% of single white women.iii Women-owned businesses contribute significantly to the U.S. economy. In 2007, 7.8 million firms were owned by women, accounting for almost 30% 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.iv
If women entrepreneurs in the U.S. started with the same capital as their male counterparts, they would add 6 million jobs to the economy within 5 years, yet only 5% of all equity capital investments and 3% of venture capital investments go to women-led businesses. (Forbes 2009 http://www.forbes.com/2009/12/17/job-growth-creation-forbes-woman-leadership-smallbusiness.html) 2. Workplace Gender Equity and Leadership The Need

The ratio of women s and men s median annual earnings was 77.0 for full-time, year-round workers in 2009 (Institute for Women s Policy Research, Fact Sheet, 2009). OR Women in the U.S. are paid 77 cents to every dollar a man earns. WFN Factsheet on impact of recession on women in the US: The number of working men and women decreased between 2008 and 2009 men decreased by 2.1 million to 81.9 million and women decreased by 1.6 million to 73.0 million.

Of the 1.3 million jobs created in the last 12 months, some 90 percent have gone to men, according to a report from the Bureau of Labor Statistics. Women have gained just 149,000 jobs. While government spending has gone toward investments in infrastructure like roads, there have been cuts in public education and other public-sector service jobs. Women make up some 57% of the public workforce, but between July 2009 and Feb. 2011, they lost a far higher proportion of the jobs. Nearly 80% of the public-sector jobs cut during that period were held by women, according to the Bureau of Labor Statistics.v Women lost heavily in the private sector as well. Though women comprised half (48.4 percent) of private sector employees at the end of the recession, they lost 42,000 jobs in this sector between July 2009 and February 2011 a period during which the sector gained 649,000 jobs.7 Unemployment for many vulnerable groups increased during the recovery: Between July 2009 and February 2011 unemployment rates increased for single mothers (from 12.6 percent to 13.0 percent), African-American women (11.8 percent to 13.0 percent), and Hispanic men (11.2 percent to 12.2 percent).9 In 2010, families headed by single women remained less likely to have an employed member (71.9 percent) than married-couple families (82.1 percent) or families headed by men with no spouse present (79.3 percent). (Bureau of Labor Statistics) According to recent research, the money invested in female-managed funds is significantly lower than that invested in male-managed funds, even when women and men managers have the same level of risk aversion, similar returns on investment and other comparable characteristics. This difference may reflect gender stereotyping as well as lower levels of advertising and visibility for women-managed funds. (NCRW Women in Fund Management)

The Opportunity There are no shortage of studies and research findings proving that women, especially in high level officer positions have a positive effect on corporate performance. Diversity of all types will improve organizational or corporate performance, but gender diversity specifically has positive effects on creative problem solving and the efficient distribution of resources. Research conducted by the University of Michigan and Cornell University found that companies with greater gender diversity out-performed those with less, often by as much as 30%. (Padnos) Fortune 500 firms with the highest percentage of women corporate officers yielded on average 35.1 percent greater return on equity and 34% greater total return to shareholders than those with the lowest percentages of women corporate officers. (Padnos) McKinsey research on organizational performance and gender diversity shows that companies around the world with the highest scores on the 9 dimensions of organization- from leadership and direction to accountability and motivation- are likely to have higher operating margins than their lower-ranked counterparts do. Second, those companies with three or more women on their senior-management

teams scored higher on all 9 organizational criteria than did companies with no senior-level women. (Desvaux) A 2007 McKinsey study looked at the top 89 European Companies and found that those with the most women on the board and at senior-management level outperformed others in their sector in return on equity, earnings before interest and tax and share price growth. (Desvaux) Over the period of 2000 to May 2009 according to Hedge Fund Research, women-owned funds delivered on average an annual return of 9.06% compared to only 5.82% among a broader composite of hedge funds. Public companies with the three or more women board members have 62% higher return on invested capital. (Catalyst) 3. Products and Services The Need 64% of illiterate populationsis composed ofare women; 60% of out of school youth are girls (International Women s Day: Investing in Women and Girls) The Opportunity Educating women and girls leads to higher wages, a greater likelihood of working outside the home, lower fertility, reduced maternal and child mortality, and better health and education. The impact is not only felt in the women s lifetimes, but also in the health, education and productivity of future generations. Education can also effect economic growth by increasing the productivity of agriculture and business with educated women more willing to use new technologies and techniques. Additionally, education can lead to higher economy wide productivity, because educating girls raises the overall quality of the aggregate workforce (Lawson). The Girl Effect Data Sheet: In Nicaragua, 45% of girls with no schooling are married before age 18 vs. only 16% of their educated counterparts; In Mozambique the figures are 60% vs 10%; In Senegal 40% vs 6% When a girl in the developing world receives seven or more years of education, she marries four years later and has 2.2 fewer children. An extra year of primary school boosts girls eventual wages by 10-20%; an extra year of secondary school: 15-25%

Women as Investors Muriel Mickie Siebert, Wall Street s First Woman of Finance and founder, chairwoman and CEO and President of Muriel Siebert & Co. said the only way to invest in women and girls was by teaching them to envision themselves as investors . Her call to women was go out there and invest; first in ourselves, next in our local communities and then globally (Lush 1)

Perhaps the greatest barrier to women (and non-white males) seeking funding is pattern recognition, or the tendency for funders to invest in those who look like them and have traditionally been invested in (i.e. White men). Less than 7% of Venture Capital investing partners are women. Recent research suggests that increasing the number of women investors offers a much- higher impact approach to expanding the funding of women-led businesses that may have been previously understood . Entrepreneurs demonstrate a strong predisposition to seek funding from members of the same sex. Called homophily, this tendency refers to the selection of people based on characteristics such as gender, appearance and race. Homophily permeates all levels of equity investment. Organizations that include women investors are three to four times more likely to invest in a women-led business. Increasing the number of women investors, therefore, becomes a critical success factor for increasing women s access to equity capital (Padnos) Founded by Herta Von Steigel, Stargate Capital s Trapezia EIS Fund is the first Venture Capital program in the UK dedicated to investing in women-focused businesses. All the companies Trapezia invests in are led, directed or substantially influenced by women or provide a product or service for women. Herta does not see this as philanthropy, but rather a good business decision. Women in Europe represent an incredible market opportunity Allison Kibble is the chief executive of Fremeda, a company that makes a medical device for women who suffer from bladder weakness. Despite the fact that one in three women over the age of 18 have this problem and about $12 Billion is spent every year on incontinence products, Kibble found it tough to even get meetings with investors. Men feel incredibly uncomfortable talking about this subject we sent out materials to many potential VCs and we knew they were immediately put on one side because the men receiving them just didn t understand the problem or what we were proposing to do about it. A few that we did manage to get meetings with said they couldn t possibly take us on as an investment as our product was too unsavoury . Trapezia was the investor who finally said yes. (Lush) NEED MORE DATA ON ANGELS AND ASOTHER INVESTORS Half of U.S. investment capital comes from women (NCRW Women in Fund Management) Researchers have identified differences in the investment styles of men and women. They have found that, on average, women tend to be more consistent investors, holding investments longer and processing a greater level of informational detail, including contradictory data, in making decisions. (NCRW Women in Fund Management) FROM Jackie s IC POWERPOINT: SOURCES? y y y control $20 trillion in investment dollars are 9% of the world s billionaires will inherit 70% of the upcoming wealth transfer

ANGEL Numbers (Source?): y y U.S.: 12% EMEA: 3%

References Desvaux, Georges, Sandrine Devillard-Hoellinger, and Mary C. Meaney.A Business Case for Women. Rep. McKinsey Quarterly, September 2008. FactBox: International Women s Day: Some Facts . Reuters. 8 March 2010 Fact Sheet 2009. Institute for Women s Policy Research. 2009 "Frequently Asked Questions."Grameen Bank | Bank for the Poor - Home.Web. 19 Dec. 2010. <http://www.grameen-info.org/>. Gender Equality as Smart Economics: A World Bank Group Gender Action Plan. Rep. World Bank, September 2006. The Girl Effect Data: Why Should We Pay Attention to Girls? Rep. Girl Effect.Org. Print. Goldman Sachs. The Power of the Purse: Gender Equality and Middle Class Spending. Rep. Global Markets Institute. August 5, 2009. HerProject: Investing in Women for a Better World. Rep. Business for Social Responsibility, March 2010. International Women's Day: Investing in Women and Girls. United Nations. 8 Mar. 2008. Web. "Investing in Women to Advance Economic Growth."The Center for Development and Population Activities (June 24, 2009). Lawson, Sandra. Women Hold Up Half The Sky. Rep. Vol. 164. Goldman Sachs, March 4, 2008. Global Economics Paper. Lush, Edie. "Investing in Women Makes Sense." Web log post. 1 July 2008. Web.<http://edielush.com/articles/investing-in-women-makes-sense>. Padnos, Cindy. High Performance Entrepreneurs: Women in High-Tech. Rep. Illuminate Ventures, Februray 1, 2010. Simavi, Sevi, Clare Manuel, and Mark Blakden.Gender Dimensions of Investment Climate Reform. Rep. World Bank, January 2010. The State of the World's Children 2007: Women and Children The Double Dividend of Gender Equality. Rep. UNICEF, 2007. The World Bank and Gender Equality. Rep. World Bank, October 2009. Issue Brief. Women and the Economy. Report United Nations, Organized by The World Bank, 23 November to 21 December, 2009.

Mandelbaum, Robb. S.B.A. Readies Remedy for Bias Against Women in Federal Contracting. [Updated 4 March 2010, cited 5 March 2010.] Available from: http://boss.blogs.nytimes.com/2010/03/04/s-b-a-readies-remedy-forbias-against-women-in-federal-contracting/ ii Drexler, Peggy. History is on Womens Side in the Workplace. [Updated 4 March 2010, cited 4 March 2010.] Available from: http://www.womensenews.org/story/commentary/100303/history-womens-side-in-theworkplace iii Insight Center for Community Economic Development New Report Exposes Damaging Wealth Gap for Women of Color. [Updated 8 March 2010, cited 9 March 2010] Available from: http://www.insightcced.org/uploads/CRWG/LiftingAsWeClimb-Report-NewsRelease.pdf iv http://www.esa.doc.gov/Reports/women-owned-businesses-21st-century v http://abcnews.go.com/US/unemployment-recession-men-return-work-women-left-economic/story?id=13185406