Why Aren’t There More Foreign Female Entrepreneurs?

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By Priya Alagiri (Founder, The Alagiri Immigration Law Firm)

The voice on the other end of the phone caught me off-guard. Young, energetic and slightly accented, the voice asked whether the recently announced immigration policies could help her to start a company. As an immigration attorney, this was a typical query for me to receive. What wasn’t typical was that the voice belonged to a woman —- a foreign female entrepreneur!

In conjunction with its recent economic plan to spur the U.S. economy, the White House announced an immigration policy shift easing visa restrictions in an effort to attract and retain foreign entrepreneurs. The White House is right to focus on foreign entrepreneurs.

According to a recent study by the Kauffman Foundation, in 2005, immigrant-founded technology and engineering companies produced $52 billion in sales and 450,000 jobs. To be sure, these new immigration policies are highly welcome. But, in the midst of the worst financial crisis of our generation and record high jobless levels, we must do even more.

Enter the foreign female entrepreneur. They are one of our greatest strengths and, given the opportunity, could be a driving force in our economic recovery. But, unfortunately, foreign female entrepreneurs are a rare breed in the U.S. They constitute less than 1% of all founders of high technology software companies in the U.S (female high-tech founders generally account for 1% of tech founders). This is surprising because this demographic is a gold mine. They possess the combined traits of two highly successful high-tech entrepreneur groups –– women and immigrants.

According to a 2010 study by Illuminate Ventures, women tech entrepreneurs are less likely to fail and have a 12% higher rate of return than their male counterparts, all while using, on average, one–third less capital. Similarly impressive, immigrant tech entrepreneurs are highly educated, creative, and inspired risk takers.

Combine these two groups and you get one super-charged, powerhouse of a high-tech demographic known as the foreign female entrepreneur.

So, why are there so few of them?

The argument that immigrant women simply aren’t interested in technology or don’t have the right education is unfounded. According to recent statistics released by the National Science Foundation, the number of women around the world pursuing graduate degrees in math, science, and engineering almost equals the number of men. In fact, the number of foreign females pursuing such degrees in the U.S. has nearly doubled in the past 15 years.

In interviews I conducted with foreign female tech-founders from the U.K., Singapore, Korea, and Canada, they said that their near non-existence is due primarily to a lack of a network and a “silicon ceiling.” Immigrant women wanting to start a company typically lack the necessary old boy’s network, and all of the women I spoke with agreed that it’d be difficult to succeed without one.

American women entrepreneurs more naturally have a network due to connections they’ve made, for example, through local friends or jobs. Immigrant males, specifically Indian immigrant males, have built a network as a result of having come first to the U.S. 30 years ago and by working hard, becoming successful, and then helping each other.

The foreign women I interviewed also said that they’ve found it difficult to succeed because the “silicon ceiling” inhibits them from obtaining funding from private investors. According to them, investors are mostly white American men who gravitate toward their own. Investors themselves have said, quite bluntly, that there does exist a bias against funding women, let alone immigrant women. One investor, for example, has said that “a ton of us decide not to invest, support, promote or work with women because of this whole ‘marriage / pregnancy’ hurdle that most women will face in their career.”

These women, though, aren’t so easily deterred. They’ve sacrificed too much to come here, but more importantly, they want in on the expansive U.S. market and the incredible U.S. talent.

So, what can be done to help these foreign women succeed, and thereby create jobs that benefit us all? Friendlier visa policies for entrepreneurs are certainly positive steps, but they fall short. The government should sponsor mentorship programs targeted specifically to foreign female entrepreneurs. This proposal isn’t so far-fetched. The City of Chicago, among others, for example, has enterprisingly created “The Office of New Americans” to provide support to its immigrant entrepreneur community.

On a private level, investors would do well in creating startup funding firms just for these women. Existing popular early-stage investment funds are currently oversubscribed, so it makes sense to carve out such niche sub-groups.

Back on the phone with my female caller, I explained to her that the announced immigration policies unfortunately wouldn’t directly help her weather the obstacles she faces. Not dissuaded, she calmly stated that she wants to be, and needs to be, CEO of her own company. With the right support system, she could be, and could aid in changing the course of our economy at the same time.

This post was originally posted at Reuters.

Top photo: Aziza Ibrahim, also known as “Um Alaa”, drives her truck loaded with gas cylinders in Amman February 11, 2010. Um Alaa is the first Jordanian woman to operate a cooking gas delivery agency. Instead of setting up a traditional business to raise the standard of living for her family, she decided to establish this agency of her own to break the decades-long male dominance in this field of work. Um Alaa says she did extensive research and had lengthy discussions with her family before going ahead with this business.

Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.

About the guest blogger: Priya Alagiri is the founder of The Alagiri Immigration Law Firm, which is based in the San Francisco Bay Area and represents a variety of businesses with regard to their immigration legal matters. She previously held positions within top law firms and the U.S. Government, including serving as a President Clinton Political Appointee at the U.S. Department of Treasury under Bob Rubin and Larry Summers. Priya enjoys helping early stage technology companies meet their immigration needs, is a member of the American Immigration Lawyers Association and has worked in India, Africa, China, South America and Europe. Follow her on Twitter at @alagirilaw.