It's Not Just Warren Buffett Who Is Bullish On Women

May 8, 2013

Why are Warren Buffett and other men bullish on women?

Warren Buffett recognizes value when he sees it. His style of investing in high-quality, under-priced companies has made him one of the richest men in the world. Women are an under-valued resource who are key to America’s prosperity wrote Buffett in an essay in Fortune.

His view on women is supported by research, which documents the wisdom of investing in women-led companies.
Venture capital firms that invest in women-led companies out perform those that don’t, according to from the Small Business Administration’s Office of Advocacy. Male dominated VC firms that rely on the good ole boys network for referrals may be doing themselves a disservice. When you get a referral from someone you know, you may scrutinize the company less. VCs that are less embedded, share the risk with other VCs, find higher performing companies, and invest more often in women-led companies.

Venture-backed companies that include more women on their executive management teams are more likely to succeed than companies with men-only executive suites, according to Women at the Wheel: Do Female Executives Drive Start-up Success, research conducted by Dow Jones. The report finds that companies with a greater percentage of women on the management team have a greater chance of success. Success is defined as going public, operating profitably, or being sold for more money than they’ve raised.

If women entrepreneurs in the U.S. started with the same funding as their male counterparts, they would add 6 million jobs to the economy within five years, according to Babson College. That’s why Dell has a special initiative, the Dell Women’s Entrepreneur Network, to accelerate opportunities for women entrepreneurs, said Steve Felice, President and Chief Commercial Officer, Dell.