Do Women Make Better Business Partners?

Very possibly, yes. While there is little direct study on gender differences among business partners, some of the research on workplace teams may have interesting implications when it comes to how gender plays out in business partnerships.

In a joint study from MIT, Carnegie Mellon and Union College published earlier this year, researchers found that the single most important element of an effective work group, was its "average social sensitivity." Basically, they found that the most effective groups were not those with the highest single IQ or average IQ overall, but those that were the best at reading subtle cues from their teammates. Teams with more women were found to be more effective overall, with women also tending to score higher on assessments geared to emotional understanding. The test these researchers used, Reading the Mind in the Eyes, indicates sensitivity to non-verbal cues (a version of this test can be found here).

According to the researchers, individuals in the most effective teams were essentially “more tuned in to one another, to subtle shifts in mood and demeanor” which seems to help teams move forward and get less “stuck” in their problem-solving. Getting stuck in problem-solving is an often-cited issue for business partnerships that find themselves in trouble, so these findings may be especially helpful in thinking about the desired characteristics in a partner.

The factors that make women critical team members may also apply to their success as co-founders in start-ups, although venture capital firms have been slow to recognize this. According to a 2014 study at the Diana Project at Babson College, about 15% of venture funding was given to founding teams with a woman, up from 5% in 1999, but still remarkably low. Businesses having all-male teams are more than four times as likely as founding teams with even one woman to receive funding. However, data also indicates that though women founders receive less funding overall, their first year revenues are 12% higher than all-male founder firms.

Forming a business partnership may also solve a common obstacle for women considering launching a business: lower confidence than men. A 2014 survey of entrepreneurs by the Global Entrepreneurship Monitor noted that women are generally risk-averse and launching a business as seen as a high-risk option. According to the report, roughly 34% of U.S. women who saw opportunities to start a new business said that fear of failure would keep them from doing so, compared with 25.6% of men. This may result in fewer businesses launched by women. Having partner, and sharing that perceived risk, may give women the additional confidence needed to get started, and once they do, indications are that they may have a higher chance of success.

TAGS: Partnerships


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