When Lisa Harris Jones launched her law firm 14 years ago, she used the only money she saw as an option — her own.
Harris Jones said she founded Harris Jones & Malone with $7,000 on the belief that "if I can't buy it flat out, then I don't need it." It has grown into a lobbying firm that takes in millions of dollars a year.
"There's nothing in this office that's on credit," said Harris Jones of the Charles Village firm.
Harris Jones isn't alone in the way she funded her business; many female entrepreneurs never seek capital from others. Entrepreneurs in general often struggle to find capital, but women can have even more trouble securing it. While women own 30 percent of the businesses nationwide, they receive only 16 percent of conventional business loans, according to a report, "21st-Century Barriers to Women's Entrepreneurship," prepared for a recent U.S. Senate hearing on the topic.
Women's difficulty accessing capital has been called the "other gender gap" after the well-documented pay gap between men and women.
In Baltimore, women own 37 percent of the businesses, according to the Mayor's Advisory Council on Minority and Women-Owned Business Enterprises. Some of the region's female entrepreneurs say the local entrepreneurial community does offer help in overcoming the challenges they face.
Women are "forced to rely on personal credit, loans from family and friends, and credit with high interest rates instead of getting traditional bank lending," said Sen. Maria Cantwell, the Washington Democrat who chairs the Committee on Small Business and Entrepreneurship, which hosted the hearing.
Krystal Glass, spokeswoman for the National Women's Business Council, said using personal money, while often the only option for many women, doesn't put businesses on a sound footing. Using personal funds also removes a "financial safety net" for entrepreneurs, she said.
While some women do secure funding from outside sources, overcoming people's perceptions of a female entrepreneur can be hard, said Jess Gartner, CEO of Allovue, which builds financial visualization and analysis software for school districts.
"Being white and male and straight is like life on the easy setting in a [video] game," said Gartner, who used angel investments to begin her business. "The more minority [characteristics] you add to life, the harder the setting is."
A recent Harvard University study shows that perception does play a role for businesswomen trying to raise money. According to the study, "investors prefer pitches presented by male entrepreneurs compared with pitches made by female entrepreneurs, even when the content of the pitch is the same."
The study concluded that it identifies a "profound and consistent gender gap in entrepreneur persuasiveness."
"It's the way [entrepreneurs] are portrayed," said Pat Lewis, a spokeswoman for OWL, a national organization that advocates for women over age 40.
An underlying bias against women as entrepreneurs might exist, as entrepreneurs are often portrayed as white males, she said.
The lack of funding for women also could be related to the lack of female investors as studies show people are "more likely to give money to someone who looks like [them]," Lewis said.
Connie Mazur cashed in her 401(k) retirement plan and used several credit cards with low introductory interest rates to fund the launch of Cybervillage Networkers Inc., an Ellicott City firm that helps set up cloud-based services for organizations and businesses.
She and her husband raced to pay off the cards before higher interest rates kicked in. It's not a funding strategy she'd recommend.
"We were fortunate enough that we did get some pretty good clients all within the first year," Mazur said. "We were able to pay back most of the debt before the high interest kicked in."
Mazur acknowledges that what she did was risky, but she couldn't secure a business loan from a bank and venture capitalists wanted to buy her business outright, not be a partner. So, she turned to credit and said she'd do it again.
"It worked out and I knew it was high risk, but it was a calculated risk and I really believed we would be able to bring on new clients," she said.
Access to capital was one of three issues facing women-owned businesses that was addressed at the Senate hearing last month. The others were access to federal contracts and to pertinent business training and counseling.
Even as national lawmakers strive to identify barriers that women face and work on laws and policies to give female entrepreneurs a leg up, Mayor Stephanie Rawlings-Blake's office aims to make Baltimore a mecca for all entrepreneurs.
Sharon Pinder, director of the Mayor's Office of Minority and Women-Owned Business Development, said female entrepreneurs in the city still face problems when it comes to access to capital and opportunity. Many start-ups owned by women are undercapitalized, which means they're a step behind financially and that much closer to failure, she said.
One problem may be what Pinder calls the "wealth gap" between women and men.
"The top 5 percent of the wealthiest people in the state and country ... traditionally are not made up of people of color and traditionally are not made up of women," said Pinder, whose office is tasked with providing businesswomen and minority business owners with resources.
Sonja Hines, an entrepreneur in Columbia, said she and her business partner used their own money to start H&S Resources Corp., a facility operations and maintenance services company, because "we needed a starting point and that's what we knew to do."
She emptied her savings and moved back in with her mother as she got the business started in 2006. The recession slammed Hines and her company hard, forcing her and her partner to take other jobs so they could keep H&S open.
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"It was 'we need to do this to survive,' " she said.
The firm rebounded and now has operations in Alabama, Georgia and North Carolina, in addition to Maryland.
Hines said she appreciated the community and support in Baltimore and Maryland. She participates in the Women Presidents' Organization-Baltimore Chapter, a member organization of female business owners and leaders of multimillion dollar businesses who meet to share resources, advice and ideas.
Harris Jones said she achieved success with the help of key Baltimoreans, such as then-Mayor Martin O'Malley, now governor, who Harris Jones said put her on "equal ground" with other entrepreneurs. Harris Jones also counts Rawlings-Blake as a friend; the mayor officiated at her wedding to Sean Malone, a former top aide to O'Malley.
"Anywhere else, I would've been one in a million," she said. "Baltimore was very supportive."