Hype for female entrepreneurs continues to reach new heights, but a glaring funding gap keeps many from thriving in the wine industry and beyond. Without investment to stimulate growth, the hype rings hollow.
In 2018, I founded Woman-Owned Wineries to help female vintners connect with new audiences and one another. We built the industry’s most comprehensive directory of women winery owners, and then we launched an accompanying club delivery program. When I sat down with designer Lisa Hobro to create our company logo, the result was a coin, meant to convey the worth of women, wine and community.
Its symbolism still feels close to my heart. Women are told, in subtle and overt ways, that we’re worthless. Society’s devaluation of women’s contributions to the workforce is well-documented. In wine, funding affects who gets to be a wine entrepreneur, what winds up in your glass and the industry’s culture.
Female founders are statistically more likely to be denied capital in every form. Let’s not sugar-coat the facts:
- Venture capital: In 2021, only 17% of venture capital went to companies with at least one female founder, and a scant 2% to all female-founded companies. Of that group, just 2% of Black and Latina founders received venture capital in 2021, according to Crunchbase. In 2022, those numbers have further declined, based on initial reporting.
- Business loans: Female entrepreneurs receive fewer loans, for smaller amounts, and at higher interest rates than men, according to a 2021 study by Fundera. In the study, women were far more likely to receive short-term funding, with annual percentage rates (APRs) that vary from 14% to 50% or higher. On average, women paid a 13% higher interest rate than men.
- Government support: In the U.S., women receive 2.5 times less funding that’s allocated for businesses than men, according to the 2021 Fundera study. Among federal Small Business Administration (SBA) loans, women receive an average of $59,857, while men get $156,279.
- Investor bias: A 2013 Babson College study showed that female entrepreneurs who showed they could “pitch like a man” were more successful in obtaining capital than those who exhibited “feminine” qualities.
These statistics have real-life implications, not just for hard-working women. For example, lack of funding to BIPOC and female founders reduces annual gross domestic product (GDP) by as much as $4.5 trillion, according to Eugene Cornelius of the Milken Institute.
“Four out of every 10 businesses in the U.S. are owned by women,” says Kim Lawton, co-founder of Enthuse Foundation, a hospitality marketing firm that provides grants to entrepreneurs. “These businesses employ 9.2 million people and generate $1.8 trillion in revenue. Since 2007, the number of women-owned businesses has increased by 58%.”
Since 2018, Enthuse has provided more than $100,000 in funding, along with networking and mentorship opportunities.
“Women are hustling”, says Lawton, but “the funding gap is still very real. Even as women are opening more businesses, the rate of funding for their businesses is shrinking.”
This jives with what I’ve witnessed and experienced in the wine business. During the four years that I’ve run Woman-Owned Wineries, I’ve watched many female vintners struggle with a lack of capital. I’ve also faced the funding gap in my own endeavor.
For all its successes, Woman-Owned Wineries is vulnerable, perhaps unusually so, given my own socioeconomic background. As someone from a working-class upbringing who has lived with an invisible disability. I’ve hovered at the poverty line while working underpaid hospitality jobs. I’ve wrestled with my share of money demons.
Woman-Owned Wineries has developed a vibrant community of wine club members and received some very generous press, yet it remains primarily bootstrapped. We’re also crowdfunded through IFundWomen, an organization that helps business owners like me raise capital and stay centered and confident along the way.
In 2020, my business received a small loan from a colleague, Maura Passanisi, who also lent capital to several female winery owners. Soon after I signed her promissory note, Passanisi embarked upon her own entrepreneurial journey.
Having worked in Bay Area restaurants, she’s motivated to build a better wine bar, one that values workers and serves wines from underrepresented vintners. Passanisi is now facing challenges to receive a bank loan.
“I’m a cis straight white woman who comes from a decently wealthy family,” she says, “I have resources, and yet [the loan process has] still been really difficult. I don’t know how any woman manages to get money without these advantages.”
A Mexican-American woman inspired by her migrant farm-worker grandparents, Cristina Gonzales has sought funding for Gonzales Wine Co. for three years. She echoes similar challenges in the loan process.
Gonzales is a single mother who juggles multiple gigs to keep her household running. When she sought bank loans, lenders hesitated.
“They’d tell me, ‘We love your story, but your finances, and what you can put down in collateral, is not going to cut it.”
Gonzales has been a dedicated member of the board of AHIVOY, the Oregon Wine Board and previously was part of the Woman-Owned Wineries advisory board. Even as she works to contribute to the industry’s evolving consciousness toward equity, she struggles to find industry-specific business grants for women, or women of color.
“I started asking around my network, asking if there is money for someone like me,” says Gonzales. “Lately, we’ve seen so many scholarships for diversity in wine. It turns out most of those are for students in the education realm, not in wine production.”
A new program from Lift Collective offers a glimmer of hope. Launched this summer, the program offers “monetary support, tangible resources, community and professional connections for new business owners working in the wine industry.”
Annually, the program will support five historically underrepresented entrepreneurs (including women) with a focus on new business owners learning the ropes of entrepreneurship.
Lift Collective has the right idea. Still, seasoned wine entrepreneurs remain out of luck in the pursuit of capital, at least for now. As a recession looms, supply chain issues persist and the costs of doing business increase, competition for funding promises to intensify. Will the industry, and investors, show more faith in women as business leaders?
I look at the coin logo and all the promise it once represented. It’s starting to feel like Monopoly money. I cross my fingers for someone to make it real.
Resources for Women Entrepreneurs
Published: August 11, 2022