“Female entrepreneur" has become a pseudo-pop culture term in recent years. The phenomenon, which has taken hold globally, has encouraged both millennials and older generations of women to engage in entrepreneurial pursuits regardless of the appalling numbers of venture capital going toward female-founded start ups.
With this in mind, Wendy Diamond, serial entrepreneur and TV personality, founded Women's Entrepreneurship Day after discovering the barriers to entry for women into entrepreneurship. Between the "bro-culture" in Silicon Valley, and the heightened exposure male-founded businesses get over their female counterparts were glaring reasons for such a concept to exist.
Since then, the day, which is now hosted in conjunction with the U.N, has served to highlight both the plight and success of female entrepreneurs. This year's conversation, held at the U.N headquarters here in new York, and attended by over 400 people, was a great celebration of women in business old and new. But while there was much euphoria, there was also a plethora of questions raised about about women's future, and breaking the very large barriers that remain to this day, in the U.S and abroad, for women in business sectors.
“Don't wear what everybody else is wearing. Don't do what everybody else is doing."
- Mikaila Ulmer, Founder Me & the Bees Lemonade
The teenage entrepreneur had a lot to say on her panel, which also included singer Sara Bareilles, who gave the audience a small rendition of her song "Brave" when she was finishing her speech. Mikaila Ulmer's insights were a welcome addition to a day that honored a lot of women who had been in business for 10, 20, 30 years. With the event playing host to 75 girls from different schools across New York, the Shark Tank brought the house down with the younger of the attendees.
“Follow your instinct. It's not just a hunch - it's actual knowledge you've accumulated over the years."
-Twinkle Khanna, entrepreneur and author
Twinkle Khanna was nothing short of adamant about the above, which ended up being a recurring theme throughout the day. Where promising female entrepreneurs might have 10-15 mentors instructing and nurturing ideas, it was the power of instinct and intution that got the majority of the day's powerhouses up on stage.
“Men have to lead the change as well and put the money into female entrepreneurs because they know that female entrepreneurs don't just make great entrepreneurs, they make better entrepreneurs."
-Shelly Kapoor Collins, Founding Partner – The Shatter Fund
Shelly Kapoor Collins, one of the few female VCs in attendance, challenged the crowd to "less op-eds, more action." Her riling speech was one of the most memorable of the day as she spoke to her experience as a female entrepreneur-focused VC that only invests in women, and encourages her male counterparts to do the same. Acknowledging the disparity in funding that goes toward female ventures, she asserted that everyone in the room when approaching a stock option, should look to female ventures for their next investment.
“Take your passion, something you're interested in, and something that hasn't been done before. That's when you go for it. That's being entrepreneurial."
-Bobbi Brown, CEO Beauty Evolution
Brown's eminence in the beauty industry landed her the Beauty Pioneer Award 2017 to deafening applause. Her instructions about entering into entrepreneurship were clear, concise and sharp, and pointed away from the hot copycat trend that has seeped into start-up culture of late.
Mikaila Ulmer and Twinkle Khana
“You have to have that feeling inside of you, that nothing can stop you. My mother told me - you've got to have a hard sense of who you are and never say no when you're given a challenge."
-Lucy Jarvis, first woman television producer
Lucy Jarvis's speech was arguably the most moving of the day. At 100 hundred years old, the first ever female TV producer stood up and told the story of how she broke women into positions of power in television. She riled her co-workers at NBC to get involved in a lawsuit during the '60s that completely shifted the dynamic between men and women on the small screen. She went on to win a Peabody award from her efforts, and was awarded the Media Pioneer Award on the day.
“I could not do it by myself. I built a team that was 'me and us.'"
-Judith Ripka, Founder, Judith Ripka
Judith Ripka's honest appraisal of how she made her entrepreneurial journey was built entirely around her team. Enforcing how essential her family, friends and network were, the jewelry designer delighted in honoring those around her that had helped her company grow to where it is today.
“Respect women and give a hand up, not out."
-Wendy Diamond. Founder & CEO Women's Entrepreneurship Day
Diamond's ecstatic introductions of her honorees really made the day. Her enthusiasm for both the cause and the women in attendance reverberated throughout the room, and her message was clear: above capital, it's guidance, mentorship and respect that female entrepreneurs need.
Shelly Kapoor Collins
“It's important for women to network with each other. Women don't do enough of that, men are much better."
-Sonia Gardner, President and Co-Founder of Avenue Capital Group
Sonia Gardner and her brother have built a billion-dollar business from the ground up, making hers one of the most covetable talks of the day. Her background in hedge funds has garnered her a lot of respect and she has consequently been awarded for work in the industry on numerous occasions, one of the latest being her appointment as Global Chair of 100 Women in Finance & Board of Trustees for the Mount Sinai Medical Center.
On the issue of mentorship and networking, she advised that women begin building their networks of friends and business partners (both women and men), from a young age in order to have an edge when you're older and possibly in need of some outside investment.
“Make people remember who you are."
-Dottie Herman, Founder, President & CEO Douglas Elliman
Dottie Herman, a stalwart figure in the New York Real Estate Market, borrowed $9M to start her business back in 1989. She then went on to raise $70M to scale her business when pitching to a boardroom dominated by men, where, she admitted that as a woman, your voice was secondary to that of the men in the room. While the remnants of this attitude still remain, Herman was very positive about the future for women in business and for aspiring female millionaires. Her advice was simple: don't leave a room without making an impression.
“The numbers are not changing and numbers don't lie. And in fact the numbers are trending in the wrong direction. They've gone from 7 per cent venture capital for women to 4 per cent for women. Stop writing op-eds, what we really need is cold hard cash, flexible capital."
-Shelly Kapoor Collins, Founding Partner – The Shatter Fund
As a female-founded start up, and having interviewed so many female founders, this point really resonated with us here at SWAAY. Kapoor Collins was absolutely vehement that standing by and continually talking about these flailing numbers will get women nowhere. It's only action and investment and pressure on others to invest in women that will change this narrative and rectify these numbers so the next generation of female entrepreneurs, such as Ulmer, won't have to face such despondency when raising capital for ventures.
All photos courtesy of Women's Entrepreneurship Day.
Business entities can be defined as the corporate, tax and legal structures which an organization chooses to officially follow at the time of its official registration with the state authorities. In total, there are fifteen different types of business entities, which would be the following.
- Sole Proprietorship
- General Partnership
- Limited Partnership or LP
- Limited Liability Partnership or LLP
- Limited Liability Limited Partnership or LLLP
- Limited Liability Company or LLC
- Professional LLC
- Professional Corporation
- Nonprofit Organization
- Cooperative Organization
As estates, municipalities and nonprofits do not concern the main topic here, the following discussions will exclude the three.
Importance of the State: The Same Corporate Structure Will Vary from State to State
All organizations must register themselves as entities at the state level in United States, so the rules and regulations governing them differ quite a bit, based on the state in question.
What this means is that a Texas LLC for example will not operate under the same rules and regulations as an LLC registered in New York. Also, an LLC in Texas can have the same name as another company that is registered in a different state, but it's not advisable given how difficult it could become in the future while filing for patents.
To know more about such quirks and step-by-step instructions on how to start an LLC in Texas, visit howtostartanllc.com, and you could get started with the online process immediately. The information and services on the website are not just limited to Texas LLC organizations either, but they have a dedicated page for guiding fresh entrepreneurs through the corporate tax structures in every state.
Sole Proprietorship: Default for Freelancers and Consultants
There is only one owner or head in a sole proprietorship, and that's what makes it ideal for one-man businesses that deal with freelance work and consulting services. Single man sole proprietorships are automatic in nature, therefore, registration with the state is unnecessary.
Sole proprietorships are also suited to a degree for singular teams such as a small construction crew, a group of handymen, or even miniature establishments in retail. Also, this puts the owner's personal financial status at jeopardy.
Due to the fact that a sole proprietorship entity puts all responsibilities for paying taxes and returning loans, it directly jeopardizes the sole proprietor's personal belongings in case of a lawsuit, or even after a failed loan repayment.
This is the main reason why even the most miniature establishments find LLCs to be a better option, but this is not the only reason either. Sole proprietors also find it hard to start their business credit or even get significant business loans.
General Partnership: Equal Responsibilities
The only significant difference between a General Partnership and a Sole Proprietorship is the fact that two or more owners share responsibilities and liabilities equally in a General Partnership, as opposed to there being only one responsible and liable party in the latter. Other than that, they more or less share the same pros and cons.
Registration with the state is not necessary in most cases, and although it still puts the finances of the business owners at risk here, the partnership divides the liability, making it a slightly better option than sole proprietorship for small teams of skilled workers or even small restaurants and such.
Limited Partnership: Active and Investing Partners
A Limited Partnership (LP) has to be registered with a state and whether it has just two or more partners, there are two different types of partners in all LP establishments.
The active partner or the general partner is the one who is responsible and liable for operating the business in its entirety. The silent or investing partner, on the other hand, is the one who invests funds or other resources into the organization. The latter has very limited liability or control over the company's operations.
It's a perfect way for investors to put their money into a sector that they are personally not experienced with, but have access to people who do. From the perspective of the general partners, they have similar responsibilities and liabilities to those in a general partnership.
It's the default strategy for startups to find funding and as long as the idea is sound, it has made way for multiple successful entrepreneurial ventures in the recent past. However, personal liability still looms as a dangerous prospect for the active partners to consider.
Limited Liability Company and Professional LLC
Small businesses have no better entity structure to follow than the LLC, given that it takes multiple good ideas from various corporate structures, virtually eliminating most cons that are inherent to them. Any and all small businesses that are in a position to or are in requirement of signing up with their respective state, usually choose an LLC entity because of the following reasons:
- It removes the dangerous aspect of personal liability if the business falls in debt or is sued for reparations
- The state offers the choice of choosing between corporation and partnership tax slabs
- The limited legalities and paperwork make it suited for small businesses
While more expensive than a general partnership or a sole proprietorship, a professional LLC is going to be a much safer choice for freelancers and consultants, especially if it involves risk of any kind. This makes it ideal for even single man businesses such a physician's practice or the consultancy services of an accountant.
B, C and S-Corporation
By definition, all corporation entities share most of the same attributes and as the term suggests, they're more suited for larger or at least medium sized businesses in any sector. The differences between the three are vast once you delve into the tax structures which govern each entity.
However, the basic differences can be observed by simply taking a look at each of their definitive descriptions, as stated below.
C-Corporation – This is the default corporate entity for large or medium-large businesses, complete with a board of directors, a CEO/CEOs, other executive officers and shareholders.
The shareholders or owners are not liable for debts or legal dispute settlements in a C-Corporation, and they may qualify for lower tax slabs than is possible in any other corporate structure. On becoming big enough, they also have the option to become a publicly traded company, which is ideal for generating growth investments.
B- Corporation – the same rules apply as a C-Corporation, but due to their registered and certified commitment to social and environmental standards maintenance, B-Corporations will have a more lenient tax structure to deal with.
S-Corporation – Almost identical to a C-Corporation, the difference is in scale, as S-Corporations are only meant for small businesses, general partnerships and even sole proprietors. The main difference here is that due to the creation of a pass-through entity, aka a S-Corporation, the owner/owners do not have liability for business debt and legal disputes. They also are not taxed on the corporate slab.
Cooperative: Limited Application
A cooperation structure in most cases is a voluntary partnership of limited responsibilities that binds people in mutual interest - it is an inefficient structure due to the voluntary nature of its legal bindings, which often makes it unsuitable for traditional business operations. Nevertheless, the limited liability clause exempts all members of a cooperative from having personal liability for paying debts and settling claims.
This should clear up most of the confusion surrounding the core concepts and their suitability. In case you are wondering why the Professional Corporation structure wasn't mentioned, then that's because it has very limited applications. Meant for self-employed, skilled professionals or small organizations founded by them, they have less appeal now in comparison to an LLC or an S-Corporation.