42% of women are less likely to start a business after having kids—here’s why that needs to change

As a mom of five, a co-founder of Motherly, and coach and advocate for female founders, I’m all too familiar with how hard it is to juggle building a business with raising kids. Starting a business is challenging for anyone, but for moms, the logistics can be mind-bending. The lack of financial and social support during pregnancy, childbirth, and postpartum in the U.S. makes entrepreneurship feel less like an opportunity and more like an impossible dream. 

A new study reveals just how much motherhood impacts women’s ability to launch businesses, especially when their kids are young.

The study

A recent study by Valentina Rutigliano from the Vancouver School of Economics and published in the Social Science Research Network reveals that becoming a mother significantly reduces a woman’s chances of starting a business—and if they’re already running one, motherhood can shrink profits. The research analyzed nearly 1,000 mother-child pairs and found that:

• Women are 42% less likely to start a business the year they give birth.
• Female-led businesses see declines in profits (21%), assets (17%), and sales (21%) in the five years following childbirth.
• The gender gap in entrepreneurial sales and profits? Nearly half of it comes down to motherhood.

Meanwhile, dads keep their businesses humming along with only minor impacts.

Why it matters

It’s well known that only 2% of all venture capital funding goes to women. If we want to fix the problem for female founders, we have to focus on the role that motherhood plays.

The U.S. has a massive motherhood safety net problem—as in, America doesn’t have one. Unlike in Canada (where this study was conducted), there’s no universal paid parental leave, affordable childcare is scarce, and the stigma of needing help persists. For moms, this means taking on the double burden of caregiving and entrepreneurship without much support. In reality, it’s a risk that too many women (literally) cannot afford to take.

This isn’t just bad for moms—it’s bad for the economy. When mothers can’t start companies or keep them afloat, we lose out on their innovation, ideas, and economic contributions. And let’s be real: Female entrepreneurs have been a driving force for social change, building businesses that meet real community needs (because they live them).

Related: Childcare is not considered ‘affordable’ in any US state—and here’s where it’s most expensive

What helps

The study highlighted one crucial factor in helping entrepreneurial moms thrive: childcare. Specifically, family-provided childcare. Proximity to grandparents—particularly grandmothers—gave women a major boost, increasing business survival rates and profitability. 

But not everyone has grandma nearby (or available), and relying on family alone isn’t a scalable solution. In the US, it infuriates me that childcare is not considered by the tax code to be an “ordinary or necessary business expense.” (Spoiler alert: childcare is ordinary and completely necessary to run a business and childcare providers should be considered a cost of doing business.)

So what’s actually needed to boost business for moms? 

• Universal childcare access so moms don’t have to choose between a pitch meeting and daycare pickup.
• Paid parental leave so moms can recover and bond with their babies without sacrificing their dreams.
• Flexible funding options for women-led startups, recognizing that childcare and caregiving are real costs that impact business success.

Related: It’s time for businesses to step up to address the childcare cliff

The bigger picture

Motherhood is a business investment. When we support moms—whether through better policies, social safety nets, or workplace flexibility—we unlock economic potential, foster innovation, and create a more equitable entrepreneurial landscape.

Too many moms are forced to play it safe because starting a business without a safety net is simply too risky. It’s time to change that. Supporting moms isn’t just good for families; it’s good for the economy. It’s time to make it easier for moms to bet on themselves—and win.

Sources:

1. Motherhood lowers a woman’s chances of starting a business. SSRN. 2024. “Minding Your Business or Minding Your Child? Motherhood and the Entrepreneurship Gap by Valentina Rutigliano.”
2. Only 2% of all venture capital funding is directed toward women entrepreneurs. World Economic Forum. 2024. “Women founders and venture capital – some 2023 snapshots | World Economic Forum.”
3. Childcare is not classified as an “ordinary or necessary” business expense under tax law. Intuit TurboTax Community Post. 2021. “Is childcare considered a business expense for a small business?”