Far fewer of the entrepreneurial folks walking around SXSW this weekend are women.
Indeed, women don't seek funding as often, or receive it as often. A couple years ago a study out of the University of New Hampshire Center for Venture Research reported that 21 percent of entrepreneurs seeking angel financing were women, and only 13 percent of those received investment. When women do seek angel capital, they lag the yield rate by 5 percent.
Yet, recent research from Babson College found that if female entrepreneurs started with the same capital as male ones, they would add six million jobs within five years.
In a session earlier this afternoon at SXSW, Kay Koplovitz, the founder of USA Network and a longtime venture capitalist, explained what she sees as the problem.
Women tend to focus on starting companies that relate to their own interests, in categories such as fashion, social media, and e-commerce, she said. Even when it comes to health care research and development, women gear new company ideas to issues that affect women, like breast cancer. For Koplovitz, that puts them at an immediate disadvantage.
"When you're talking to [male investors] who are not as sensitive to the markets you're starting your company in, they may not listen or understand what you're saying," she said.
Another part of the issue: "Women don't promote themselves as heavily," said Koplovitz. "Women don't take credit for their own experience."
Here are some ways Koplovitz said you can improve your chances:
1. Focus on what investors want to know.
Aside from what your product is and who's on your team, investors want to know how much money you're asking for, what you're going to do with it, and how much they're going to get back--and when.
2. Understand the playing field.
You want to know not just about your company's competitors, but those companies (in any industry) that are also trying to raise funding.
3. Inspire confidence from the outset.
Investors are looking at you and trying to understand if you're capable of driving your company to scale. Do you make them believe you can build an A-level team, grasp the competition, a revenue model, and an understanding of what will drive revenue? If you don't nail it from the get-go, you won't reel in an investor later.
4. Get very comfortable with your finances.
You will be grilled on the numbers. Understand them. Consult accountants, lawyers. Get in shape so you can pitch your company from the product or service right down to the your financial models. Know how many people have signed up, and your retention rate.
5. Speak to your exit strategy.
What is your plan for returning money to your investors? They have to exit to get their money out.