Money. It's a constant consideration for every entrepreneur no matter what stage they're in-bootstrapping, going for series A or B, finally turning a profit or exiting their business. Access to capital is one of the biggest barriers globally for founders to scale their businesses.
I used to do anything to make money in my youth.
"Dad, I will clean your closet or wash your car."
That was the capital I needed to start my lemonade stand to then rid the thirsty bike riders of their allowance as they cruised by. Not so different from an engineer coding from their dorm room and begging mom for some money to start their new app. Nowadays, it's not that easy getting money for big ideas, and funding has become a lot more complex.
Every country has their own focus rules on access to capital. Venture capital is limited to few countries beyond the U.S. such as the United Kingdom, Canada and Australia. However, it is not the norm (or indeed legal) in the majority of the world. Bank loans are another avenue of getting the cash needed to move forward, but after the global financial collapse in 2008, it has become harder for entrepreneurs to get loans, particularly given the failure rate of many fledgling businesses.
Don't get me started on women's access to capital. Women business owners get less than 5 percent of venture funding in the U.S.-and in some parts of the world, women are not even allowed to own their own business, much less take out a loan. And imagine how hard it is to start and manage a businesses if you don't have a bank account, which is true of huge swaths of the world today when it comes to women. However, the rise of crowdfunding has become another channel to level the playing field for women's access to capital and is creating some interesting dynamics in more traditional areas of lending.
Women have found more success raising capital online compared to traditional funding: They are five times more successful raising capital through crowdfunding than through venture capital funding and nine times more successful when compared with traditional banks. The old guard of venture capital has not caught up with the public trust of women founders and CEOs. But with women-owned businesses starting to deliver consistently strong results, the banks and VCs are recognizing that they are missing an opportunity.
And let's remember that it's not only the entrepreneurs whose primary concern is money-the banks are competing for the best investments-and those who ignore women risk losing some juicy returns, as the crowdfunders and more enlightened angel investors have proven.
Finally, we need more women within the ranks of VCs and mainstream banks, so that there are more women considering investing in women-owned businesses. On Bloomberg Market Makers, I was challenged by one analyst saying that VC investors are "gender blind." Male investors may believe that they are gender-blind, but the numbers prove otherwise-less than 5 percent! Unconscious bias, by its very nature, is extremely hard to overcome.
Then there are other funding avenues to consider. Corporate venture funding is a positive trend. Groups like Dell Ventures and Intel Capital have invested in new ground-breaking technologies that are good for both their businesses and for those founders they are investing in. Diversity funds such as Manos and the Comcast Ventures Catalyst Fund are a critical new part of the ecosystem. As a humanitarian and passionate proponent of 'the triple bottom line', funds that invest in entrepreneurs that own companies who are saving lives are my favorite. Skoll is the leader in this arena and are destined to change the world as are the many crowdfunders, angels and progressive VCs who are following their example.
Whether directly or indirectly, I believe that at some level, all entrepreneurs save lives and they need every ounce of support. I was recently shocked to hear that some market analysts still don't know about this disparity in the venture community, so we need to ensure policy makers fix some of the big outstanding problems and that starts by signing the https://entrepreneursunite.com/ petition. Please help the UN put entrepreneurs and job creation on their to-do list for the next 15 years. Use your voice and let's get this money rolling!