2011-11-30

Co.Exist

10 Ways For Female Entrepreneurs To Get Funded

We need more companies run by women, but they’re often shut out of the investment game. Here are some ways to break through the VC glass ceiling.

There are many myths about what makes any given community great for entrepreneurship. The Kauffman Foundation, which has done some of the best research on what makes entrepreneurs tick (and what helps them be successful) admits that the “magic sauce” data about startup success (or failure) is just not there.

At the same time, there is a growing consensus that new companies are critical to creating a strong economy. From my perspective, new companies started by women will be one of the keys to a truly sustainable new economy. But first we have to overcome one of the biggest challenges within the ecosystem for women entrepreneurs: getting enough of the right amount of funding at an early enough stage to start and keep a company moving forward.

We have to create an environment that will help grow young businesses if we want women entrepreneurs to succeed. Ever a pragmatist, I wondered where we could find lessons learned in the real world that we can build upon.

So in October, my company (SmartGirls Way) took this question to Boston, which boasts a relatively high success rate of angel investment in women-founded companies. We partnered with the Center of Entrepreneurial Studies at Simmons College School of Management to bring together some impressive women entrepreneurs as well as investors of both sexes to dig deeper into the process of building a robust financial support network for women entrepreneurs.

Here are the top 10 insights from that great discussion:

Seek The Partner(s) You Need. It is very important to know what you can do and what you can’t do and have the right partners on your founding team.

Be Persistent. You will speak to hundreds of people and many of them will turn you down--at first. Investors often say no when they mean “not right now," and they tend to invest in women and companies who are consistent and persistent.

It’s Not Personal. Especially important for women entrepreneurs to remember. It’s a business proposition and even though it may be “your baby,” it’s not personal. What data is there for you to mine to assure success the next time?

Build Relationships. You are creating a network of people who will introduce you to others, so take mentors wherever you get them. Investors tend to look for lines rather than dots. It’s about more than money.

Really Sell Your Vision. It’s great to know the business. But if you can convey that moment when the light went on for you, your potential investor will be more likely to see what you see. The investors we talk to tell us that never gets old. Passion sells and that’s great news for women entrepreneurs.

Understand Your Core Risk Also know how you are going to address it. It’s critical to sell your vision, and know what you will do about your challenges.

Really Listen. Get a dialogue going. Come in as ready to listen as you are to pitch.

Have A Clear Value Proposition. Know your business inside and out, and be prepared for your number to be cut in half. Make your ask strategic and don’t be overly modest about what you need and what you will do.

Have a Plan B! Nothing reduces anxiety like knowing that you have multiple options. Think through your worst- case scenario and be prepared to act on it if you need to.

Leverage Your Strengths. It’s important to remember that getting funding is as much an art as a science. You really need to use your intuition and integrity to discern the best decision for you and your company.

What Boston showed us that day was that if you can do the above, funding will follow. It just takes a few committed investors to turn an entire community into a great place for inspired women to grow businesses. And that’s the starting point for a blueprint of successful entrepreneurial cities for women.

Add New Comment

9 Comments

  • HomeZada

    Jean,
    Thank you for your article. As a female entrepreneur who is in the process of securing funding, I agree with all your key points.  I sometimes consider the process of securing funding as an enterprise sales cycle and in sales sometimes it is best to have a thick skin.  Also in our team of co-founders, the balance of the genders is coming in handy.  We can better learn all the prospectives our clients might exhibit.
    Thank you
    Elizabeth Dodson
    co-Founder, HomeZada (www.homezada.com)

  • Jeffrey

    I especially like the part about having a plan B(J). Hilarious! Wait... that is just where my mind went, not what you wrote. Sorries.

  • G. E

    Awesome article. Love reading and assimilating tips from strong, motivating women who risked and pursued their entrepreneual dreams. Researching your industry, having a clear value proposition, practicing your pitch and asking questions are key things to master prior to swiming in the "funding" waters.

    G. Erowele
    Cofounder, CareNovate, LLC
    http://www.carenovate.com
    http://www.facebook.com/cnovat...

  • Dave Cannon

    How do these tips differ from the laundry list given to every entrepreneur? There's an endless collection of "must-haves", crucial make-or-break components of your pitch, business plan, and team. Everyone has their own recipe after the fact. I normally enjoy the articles here, but this just seems like filler.

  • Noel Gill

    I agree with Dave Cannon on this, if you could add more specific points about how women could go for ways that back their entrepreneurship experiences like the dos and don'ts and the different types of investment that they can benefit from then it would have been more helpful and enjyable to read.

    In my opinion, stuff like Angels, crowfunding and the recent act supporting it, vendor funding and the facts about micro finance could go into the article. Even though your article is more qualitative in nature, using some facts to back that data could get you a better response. Just sayin'!

  • Mae Hughes

    I TRULY appreciated this article. I am building my own business 2ND CHANCES 4 FELONS, so I often search for tips and advice via the internet. I have asked several people for answers to questions that I have but I have been unsuccessful with getting answers. I enrolled myself into college so that I can gain the knowledge on my own. I just completed my first year, and I am doing very well in my classes. My reason for creating my company is because of the hardships I faced as a convicted felon trying to re-establish myself and my life after being convicted. I begun helping felons in the Dallas Fort Worth area by locating employment, resources and need to know information and posting it to Facebook. After the overwhelming response from felons elsewhere I began to assist felons all over the United States. I opened my website www.2ndchances4felons.com on May 10,2011, as of today it has 448,667 views. I do not receive compensation, and I offer assistance FREE of charge to every one of my clients. I also do not receive funding, thus far I have funded everything on my own. After gaining more knowledge from college, I began to look for ways to generate revenue for my company, so after exploring my options I added Google ads to my website. I just made it to earning my first check from Google, which will be $100. ( Google pays in $100 incriments) My plan is to continue to explore ways to make a profit, and save all of my checks from Google. I am determined to make my company a success, so that I can give my children, and other children of felons a chance at having a better life. I make no excuses for the fact that I am a convicted felon, nor do I look for pity from soceity, I just want the opportunity to prove who I am today. Today I am a mother of six beautiful children, a college student, and I am building a business on my own from the ground up. I obide by the law, at all times, and am 11 months away from SUCCESSFULLY completing probation. I am not only rebuilding my own life, I am helping others to do the same. I have goals and dreams of taking the foundation that I am laying now, and turning it into a employment service for felons. I am determined to succeed and make my dreams a reality, so I spend countless hours trying to gain as much knowledge as possible so that I will be able to. I really appreciate this article, it has enlightened me to some great tips and useful information. Mae F. Hughes Founder of 2ND CHANCES 4 FELONS (2C4F)

  • Michelle Ferrier

    Jean, thanks for your tips! I agree that female entrepreneurs are critical to the world as are minority entrepreneurs of both genders. I'd say the most difficult one on the list for any idea is building a solid team. I've been "dating" several key players to my team, some whom have fallen by the wayside, others who have bought into the vision but not a role yet. In a content/technology startup, finding solid team members can be challenging. And I don't think you need to be in Silicon Valley to make ideas happen. Any ideas on how to find and land good team members?

    Michelle Ferrier
    Founder and Publisher, LocallyGrownNews.com
    Founder, Women's Community News Franchise