This article first appeared on the WeXchange blog
Looking for funding is difficult for any entrepreneur and the hard truth is that it is harder for women entrepreneurs. Today, only 4% of Venture Capitalist and 20% of Business Angels in the US are women. In the UK, only 14% of business angels are women and am pretty sure the figures may be even lower in Latin America. Ok so that was the bad news! The good news is that things are moving forward, although still slowly.
3 Key Global Trends in Funding for Women Entrepreneurs:
- More Money:There are more and more women angel networks, crowdfunding websites for women entrepreneurs and Funds for investing in women entrepreneurs
- More Awareness: More research is being published about how women entrepreneurs give better return on investment to investors as well as statistics about funding for women entrepreneurs; and tech/startup conferences are making sure they have more women speakers
- More Noise: more articles being published every day, on funding for women entrepreneurs, compared to one per month when I first set up a google alert 3 years ago!
Over the past 3 years I have personally interviewed over 250 women entrepreneurs from Europe, North America and Latin America about their funding journeys as well as investors about what they are looking for.
Here are some of my key tips, to help you on your Funding Journey:
Before you even start:
Think about what kind of company you want to be, and then depending on that, what kind of funding you need, for what.
Looking for Funding is a Process and a Performance:
A Process: there are many key predictable steps you need to take, in a certain order, in order to get funded. Some of these include:
- Preparing your 12-15 slide Pitch deck, Executive Summary, being clear on the problem you want to solve, how big it is, why you should solve it.
- Building an MVP (minimum viable product) – testing it on real customers, getting feedback and refining it.
- Showing signs of traction (that there is real demand) for it.
- Having a clear vision.
- Building your team.
To get their money, you will need to convince future investors about why they should invest in you. In the early stages of building your company, investors are mainly investing in you, the entrepreneur, so you have to think of the following when doing your pitch:
- Be authentic, be you.
- Share your vision, passion clearly and show you can take on feedback.
- Answer their questions directly.
- Don’t take feedback personally!
- Practice, practice, practice and refine your pitch for each investor.
TIP 1: DO YOUR HOMEWORK
- Research your investors:there is a lot of information available out there on the internet (Linked In, Crunchbase, Angellist…)and in your networks. Find out as much as you can about the investor/fund and the people you will be meeting. Prepare your questions for them.
- Look beyond your Family: yes you should try to raise from friends and family, and make sure you try other sources too.
- Sources of Funding:research all of the different sources of funding available to you, depending on your region, sector and also look at investors beyond where you are based.
TIP 2: MAKE YOURSELF VISIBLE, GET OUT THERE
- Apply for startup competitions (like WeXchange!),even though you may think you are not yet ready
- Network heavily in your startup community, at your sector/industry events
- Push your company and yourself out on social media, amplify your voice.
TIP 3: HAVE CONFIDENCE, THINK BIG, ASK FOR MORE MONEY
- Have confidence in yourself and what you are doing. Surround yourself with great colleagues, advisors, mentors
- Always be thinking bigger about your product/service/company
- Ask for at least 18-24 months runway when raising your seed round.
- Do not ask for the magic number of $500K – ask for much more (see above!)
Other Useful Resources:
- Must Reads section from Global Invest Her website
- Request an Invite to our Portal to help you become investor-ready
- Sign up to our Newsletter (box in footer of the page) to get regular updates on Funding for Women Entrepreneurs
- Article in Spanish by Bolsamania