How New York City Became the Top Place for Female Entrepreneurs

New York City’s reputation is well-known across our pop culture. It’s the subject of legendary songs, the setting for Hollywood blockbusters and the home of celebrities (and celebrities-to-be). Few people realise, however, it is also a top place for female entrepreneurs.

THE top place, to be specific.

New York City is the top city for female entrepreneurs according to the Dell Corporation’s Women’s Entrepreneur Cities Index (WE Cities Index). This is a well-validated and comprehensive assessment across the globe and is the only gender-specific index that looks at a city’s ability to attract and foster growth of women-owned firms.

Last year, the Index assessed 50 cities based on technology, culture, capital, market and talent – and organised the results into two pillars: “Operating Environment” and “Enabling Environment”. And it was no surprise to us that the Big Apple earned the top spot for its support for female business owners and entrepreneurs.

For comparison, Sydney was rated an impressive #11 overall, with Melbourne, which made its first appearance in the rankings in 2017, coming in at 17th. Both cities ranked in the Top 10 for Culture, a less tangible, yet crucial category. It measures the prevalence of relevant mentors, networks, and role models and the predominant attitudes and expectations of that society toward women entrepreneurs.

With NYC commanding the overall lead, I wanted to look at the policies, programs and initiatives that are helping the city cement its standing as a place for female entrepreneurs to flourish. While our job is to help top Australian startups expand into the US via New York, we can also bring some of these ideas back to Australia to ensure we continue to climb in the rankings:

1. City-backed Crowdfunding for Female-Owned Businesses

Just a few months ago, NYC Mayor Bill de Blasio announced an exciting new crowdfunding initiative, in partnership with microfinance company Kiva. Through WE Fund: Crowd, women entrepreneurs can apply for crowdfunded loans of up to US$10,000, with the City contributing the first 10% of their loan request. The program is designed to reach at least 500 businesses over three years, with US$3 million in loans pledged.

Leaders had noted that 70% of women entrepreneurs in New York City cited access to capital as a major challenge as they launch and grow companies. Gregg Bishop, Commissioner of the City’s Department of Small Business Services said, “Having the City as their first investor will help women entrepreneurs build momentum in their crowdfunding campaigns and attract additional investors.”

2. Measures to increase government contracts for female and minority-owned businesses

The city has taken several steps to increase the number of female and minority business owners who win government contracts – and the results have been impressive. One program Strategic Steps for Growth (SS4G) M/WBE features eight months of intensive business education taught by faculty of New York University’s Stern School of Business. Business owners receive support developing individualized, three-year business growth plans and participate in sessions on how to best compete for City contracts. Officials say the program has helped more than 100 minority and women-owned businesses win US$93.5 million in city contracts, including a record high US$28.6 million over the last year alone. Participants have also reported adding nearly 800 new jobs after completing the program.

City leaders have also taken steps to expand legislation aimed at increasing equality in government contracts. In 2015, Mayor de Blasio mandated that all government agencies must appoint an officer to represent the interests of women, with US$16 billion dollars funding over ten years.

3. Stronger access to Series A funding

Many entrepreneurs believe the US West Coast is the place to raise funds but research from Female Founders Fund shows a greater percentage of female entrepreneurs are finding success in New York City. In 2017, NYC-based companies led by female CEOs represented 13% of total Series A deals, compared to 10% in the Bay Area. Most notably, the average size of women-led rounds in New York increased by 55% from $6.2 million in 2016 to $9.6 million in 2017.

Some of the largest female founder-led deals included Ellevest, which raised $34.6 million, Maven Clinic, which raised $10.8 million and Frank, which raised $10 million. While there is still a lot of room for improvement, the numbers led Female Founders Fund to conclude that New York “remains more female-founder friendly than the Bay Area.”

New York City is now home to around 360,000 women entrepreneurs. The most promising number, however, is how fast that is increasing. The number of women entrepreneurs has increased 43% since 2002. By comparison, the number of men entrepreneurs grew 25% over the same period.

At FD Global Connections, we are committed to enabling great startups to learn from the best the Big Apple has to offer. By adopting some of the policies and programs that have proven successful overseas, the Australian ecosystem can continue to grow and female and minority-owned businesses can reach their fullest potential.