technology and entrepreneurial finance options for women

7/27/2019 Technology and Entrepreneurial Finance Options for Women

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Running head: TECHNOLOGY AND ENTREPRENEURIAL FINANCE OPTIONS 1

Technology and Entrepreneurial Finance Options for Women

Joy Carter

Walden University


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TECHNOLOGY AND ENTREPRENEURIAL FINANCE OPTIONS 2

Technology and Entrepreneurial Finance Options For Women

Technology impacts and influences every aspect of the lives of most people of the world.

The term technology has come to be used and applied frequently while still remaining obscure

and difficult to define. It is common to ask what is technology? The answer, however depends

upon context and to whom the question was posed. Merriam-Websters online dictionary (2011)

broadly defines technology as the practical application of knowledge, especially in a particular

area, and a manner of accomplishing a task especially using technical processes, methods, or

knowledge. Whether directly or not, every facet of life and business is impacted and influenced

by some form of technology. This extends, of course, to the field of entrepreneurial finance. An

analysis of how technology can be utilized to enhance and even create entrepreneurial finance

options reveals unique opportunities for women to improve their rates of success in business

ventures and capital procurement. This brief study will examine current trends in both

technology and entrepreneurial financing and how such trends can improve financing options for

women-owned businesses.

Analysis of the Field

The field of entrepreneurial finance is at once broad and very narrow. With

multitudinous theories on entrepreneurship, including social entrepreneurship and entrepreneurial

innovation theories, there is evidence of debate over how even to study entrepreneurism.

Financial management, economic fluctuations, credit worthiness, and global competition further

muddy the waters of the field of entrepreneurial finance. Researchers Busenitz, West,

Shepherd, Nelson, Chandler, and Zacharakis (2003) assert the need for a separate and more


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comprehensive discourse and research in the area of entrepreneurship. They purport that

focusing entrepreneurship research at the intersection of the constructs of individuals,

opportunities, modes of organizing, and the environment will define the field and enhance

legitimacy (Busenitz et al, 2003), and they further suggest the need for scholarly investigation of

decision theory, start-up factors of production, information processing and network theory, and

temporal dynamics in relation to the field of entrepreneurial study.

In the currently sagging global economic climate, scholars and researchers are beginning

to recognize the need for more focused study in this area. Carter(2011) suggests multiple areas

worthy of investigation to accommodate more relevant and accurate research and data in this

area. In a review of current literature on entrepreneurial finance, she noted important gaps and

makes the following key suggestions:

Micro level data and analysis of regional and specifically rural rates ofentrepreneurship, access to capital, and access to technology need to be

examined.

Information on entrepreneurial finance comparisons and success ratesalong lines of ethnicity, race and industry are also missing from the

assigned literature. Gender-based data, assumptions and comparisons

abound, but there is much to learn by examining the intersections of these

other factors.


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Assessments for determining the right amount of startup capital needed byentrepreneurs, as well as the accuracy of anticipated growth funding needs

are necessary (Carter, 2011).

Overall, the field of entrepreneurial finance is far more nuanced and intricately connected to

other areas of business and global economic fluctuations than current research and data

encompass.

Current Trends in Technology

Among the current technological trends are virtual office administration, outsourcing, and

cloud computing. Each of these trends offers a significant advantage for business owners who

take advantage of them. According to Microsoft (2011), cloud computing offers a paradigm

shift in cost savings, agility, scalability, and global reach that is simply too powerful for any

enterprise to ignore. In his article on outsourcing, Elango (2008) asserts the value and necessity

of small to medium sized firms viewing and utilizing outsourcing as part of a strategic plan rather

than merely as a cost reduction measure. In reality, outsourcing offers value on both of these

fronts, by not only reducing costs and raising the financial leverage of a firm, but also by

improving the overall strength of a firms strategic plan.

Sen & Hag (2010) point out in their article, that outsourcing is key to process

management. Wherever a process can improve a firms bottom line as well as their product and

service offerings, it is a step in the right direction. In a review of the Sen & Hag article,

Aberdeen (as cited by Buchanan, 2010) states that:


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Despite their limited resources, the survey results show that over the last 10 years

outsourcing by SMFs (small and medium firms) have increased in the areas of

research and development, product development, manufacturing, marketing/sales,

and distribution (Buchanan, 2010, slide 22).

Improving effectiveness, efficiency, and cost savings makes any business a more favorable

financing candidate. Internet and software technologies in particular offer firms multiplied

opportunities to improve their bottom line and growth opportunities, and for women-owned

firms, theses advances in technology offer new and exciting ways to level the playing field and in

some instances, if properly leveraged, gain an advantage.

Current Trends in Entrepreneurial Finance

Seed funding, commercialization, and government-back loans are just a few of the current

entrepreneurial finance trends in the marketplace today. According to Carter (2011):

The on-going evolution of the knowledge-based, global economy is making it

necessary for this public-policy influencing group to review its methods for

spurring innovation as well as reaching and sufficiently supporting the businesses

that it serves. Amongst the challenges pointed out are expansion of assistance,

preparing SBIR award recipients for commercialization of their businesses, while

also offering federal seed money for such commercialization growth

opportunities.

Carter(2011) also suggests that:


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Amongst the current topics in Entrepreneurial finance are many gender-based

studies, and data based on the impact of globalization and the new knowledge-

based economy. I would propose a particular a focus on the internet/E-commerce

technologies that can give businesses a financial advantage, increase their

profitability, and decrease their need for or dependence upon outside financing.

Many firms do not properly research and our calculate the technology costs which

should be included in their budget consideration or their profit generating

potential. I believe cost minimizing strategies are available, but because some are

newer and non-traditional or less understood, many entrepreneurs and business

owners miss great (and inexpensive) opportunities to generate income.

How Do These Trends Matter to Women Entrepreneurs?

There are numerous articles which deal with the topic of gender in entrepreneurial

finance. Becker-Blease & Sohl (2007) looked at whether or not the angel capital field was level

for women-owned firms. According to their findings, entrepreneurs demonstrate a strong

preference to seek angel funding from angel investors of the same sex. However, with respect to

the awarding of angel financing, we find only limited evidence of homophily between 2000 and

2004. Orser, Riding, & Manley (2006) found that on the whole, women-owned businesses tend

to be smaller in size and scope, and tend to be less likely to seek outside funding. The current

technological trends such as outsourcing and cloud computing have the possibility of multiplying

and maximizing the capabilities, reach, and viability of women-owned firms.


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In their article on gender, entrepreneurship, and bank lending, Carter, Shaw, Lam, &

Wilson (2007) examined the differences in lending application assessment in terms of gender

socialization, considering the gender-based perceptions and socialized norms of both the lenders

and the firm-owners. Marlow & Patton ( 2005) went beyond the popular debate about

discrimination against women in lending. Instead of simply presenting evidence that gender

discrimination against women exists, these researchers asserted that such discrimination

subordination limits the accrual of social, cultural, human, and financial capital and so places

limitations upon womens abilities to amass personal savings, generate credit histories attractive

to formal lenders, or engage the interest of venture capitalists (Marlow and Patton, 2005). With

discrimination against women being seen as a social norm of sorts, the current trends in

entrepreneurial finance, as well s those in technology are critically important to women

entrepreneurs, and to their ability to successfully secure financing for their ventures.

Research Topic

Many plausible and interesting research topics have come to light in the process of

cultivating a scholarly approach to entrepreneurial finance theories, trends, and research. Of

particular interest to women entrepreneurs would be the intersection of factors such as access to

technology and mentoring opportunities. Proposed research questions could include the

following:

1. How does mentorship improve women entrepreneurs access to financing?2. What kind of mentoring would yield the best results: formal or informal; arbitrary or

dedicated mentoring?


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A comprehensive research undertaking would also seek to ascertain how access to technology,

particularly internet technologies impacts mentorship, and whether or not it ultimately produces

successful, fair, and equitable financing options for women business owners.

In a forum discussion on entrepreneurship, Carter (2011b) offers personal insights on the

value and frustrating lack of viable mentoring opportunities for women in business:

As an African American entrepreneur, I have often sought for but found it difficult

to find an accessible cadre of mentors in my area of business. Mentorship

amongst minority business women, especially African American women is an

area of great potential (Carter, 2011b).

Carte goes on to inquire about any known research studies which highlight the benefits or even

the existence of entrepreneurial mentorship networks for African American or other minority

women groups. She points out that studies of this nature could be immensely beneficial, and offer

greater insights and opportunities for financing options and improved management of financial

and operational skills of budding entrepreneurs (Carter, 2011b).

Future Directions

As researchers, scholars, entrepreneurs, and consumers continue to shape the

marketplace, drive innovation, and spur business growth, expansion, and entrepreneurship, it is

important to build on the strides made in opportunities for women, while not resting on them.

While women will continue to find ways to innovatively fund their business ventures and

circumvent the blockades erected by social norms, gender preconceptions, and outright


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discrimination, the new tools available through outsourcing, cloud computing, networking, direct

marketing and globalization offer powerful options for success. These factors, along with

internet and software technologies, as well as time and cost reduction and savings are harbingers

of a possible sea-change in business as we know it. Future directions are only limited by the

imaginations and determination of entrepreneurs, especially those who are female.


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