Women starting record number of new businesses
Entrepreneurial activity among women reached its highest level in five years
KEY POINTS
- Women founded 49% of new businesses in 2024, with strong growth among millennials and women of color.
- Flexibility, autonomy, and values-driven goals are key motivators, especially in personal services and community-focused sectors.
- Despite growth, women face funding challenges and are less likely to use SBA or equity financing, increasing financial risk.
Women launched nearly half of all new businesses in 2024, according to the newly released Gusto 2025 New Business Formation Report. The report, which analyzes five years of business formation trends, found a 69% increase in the number of women-founded businesses since 2019.
Women were more likely than men to start businesses across a range of industries, particularly in community-focused and personal services sectors such as healthcare, social assistance and retail.
Flo Akinyeye, a business banker at BOK Financial® who has worked with women-owned companies for nearly two decades, said the trends reflect what she sees in the market. “For a lot of women, entrepreneurship is about reclaiming control, whether over their time, their income or the impact they want to have. Now more than ever, women don’t want to risk putting their futures in the hands of someone else.”
Flexibility and autonomy drive motivation
While financial goals remain important, the report found that flexibility and autonomy are central motivators for women. For example:
- 62% of women entrepreneurs said they started a business to set their own schedule, compared to 49% of men entrepreneurs.
- 71% of women entrepreneurs said being their own boss was a primary motivation, compared to 62% of men entrepreneurs.
Akinyeye said many of her clients share these values. “They’re not just chasing revenue; they’re building a lifestyle aligned with their values,” she said.
Millennials and women of color are leading growth
The increase in women-owned businesses was especially pronounced among younger generations, as well as among Black and Asian American Pacific Islanders (AAPI) women.
“Younger women don’t want to stay in one job for 30 years,” Akinyeye said. “They want to do something meaningful, something they own—something they can pass on to create a legacy. And they’re using tools like social media and digital platforms to get there.”
Funding patterns reveal resourcefulness and risk exposure
Access to capital remains a barrier for many women-owned businesses. The Gusto report found that women were more likely to use personal savings, family contributions or private loans rather than SBA-backed or equity financing to launch their ventures.
For instance, in 2024, two-thirds of new small business owners who sought financing from friends and family were women. Akinyeye said she often sees this in her own practice. “Many women I work with are bootstrapping or starting smaller and scaling thoughtfully. They bring in detailed business plans and have a clear strategy to cover debt and pay themselves.”
However, this funding approach also carries risk. SBA loans, which offer federal guarantees of up to 85% of the loan value and can help shield personal assets, were less frequently used by women. Just 42% of SBA-backed loans in 2024 went to women, compared to 58% to men, according to Gusto.
“I don’t know if everyone knows they can walk into their bank branch and ask to speak to someone about funding for their business. That’s what business bankers like me are here for.”- Flo Akinyeye, a business banker at BOK Financial
The gender gap was even wider in equity financing. Only 30% of businesses that used private capital investment were owned by women. Among businesses that actively sought investment, women were 75% less likely than men to secure equity funding.
This discrepancy matters, the report notes, because using personal debt or unsecured funding can increase financial risk for owners if the business struggles. Equity and federally guaranteed options can provide more insulation but remain underutilized by women founders.
Resources and advice for women entrepreneurs
Akinyeye encourages aspiring business owners to build a banking relationship early, even before seeking funding. “Don’t wait until you need capital to connect with a bank. Come in with your ideas, ask questions and start the relationship,” she suggested. “We can help you build a plan, even if you’re not ready to borrow yet.”
She also recommends tapping into community resources, such as:
- Local small business offices or incubators
- City or state-run entrepreneur programs
- Community development financial institutions
- Grants and fellowships
- Chambers of commerce and networking groups
“There are more resources than people realize,” Akinyeye said. “The key is not trying to do it all alone.”