We've covered so much ground in this series, on everything from equity crowdfunding to raising capital, to speaking the language of investors, and now I want to talk very specifically about how women can get funded.
While it would be nice to assume it is the same across the board, you don't have to look very far to realize... it isn't. Women founders and CEO's face hurdles that men, in their same positions, simply don't face. If that's difficult to read, let me serve it up in numbers instead. According to PitchBook, in 2016 companies with only female founders accounted for only 3% of funds raised. Seems a bit (a lot) low to me. For that reason, I went to women who are either in the process right now, women who gave up the process and are just bootstrapping their way to the top, or women who got funded to share with you all of the (nitty-gritty) details you need to know about what works and what doesn't.
Expect and Be Ready to Do and Give MORE
For someone like Mallory Dyer, co-founder of GraphLock, Inc. who is bootstrapping and social crowdfunding while she learns the ropes of getting funded, a lot of the learning process has come down to confidence in her pitch and learning how to be taken seriously. As modern as our world is, it isn't quite modern enough yet for a woman to walk into an investor meeting and be assumed the founder or CEO of a potential billion-dollar business. Gaining that confidence to walk into a room and know your pitch, know your financials, and know your business so well that you have no fear of the process will change everything. Aside from confidence and perfecting your pitch, there is plenty more you'll need to know.
Let's Move On and Talk About Coachability
Because it can be more difficult for a woman in some industries more than others, it's easy to rely on ego and get that chip going on your shoulder. According to Annette Lavoie, creator of Daisy Clip, women (especially) need to be coachable, willing to learn and grow with the process, without ego getting in the way.
Of Course We Are Coming Back to Market Proof
Above everything else, being in product design, there is one truth that never fails, and one thing every investor needs to see: proof of concept. There is also a very cyclical danger while waiting for funding, because you can get caught in attempting to mitigate risk on a barely there budget, while simultaneously attempting to gain traction for market proof, while also attempting to get proper paperwork in place to show legitimacy... and so it goes... on and on and on. You may not be able to totally avoid this cycle, but you can limit your time spent circling with these tips from Laura Wagner, CEO and Founder of Digitzs:
- Ditch the stigma: Even though, as Laura points out, there may be a stigma associated with real businesses not needing to go the route of equity crowdfunding, this may be one of your only options to get funded for your seed round, to get noticed by potential VC's and Super Angels. (Super Angel= Networth $50M+). The landscape of crowdfunding is changing so you need to know your options, do your research, and go into with a plan.
- Understand the stages: Your pitch and ask, as well as your financial breakdown needs to match the stage you are in. If you are too early-stage, as Annette was when she went straight to VC's, you'll end up taking a step backwards. Understanding where you are will save time, money, and effort. Let's do a quick breakdown of the first three stages you need to familiarize with, if you haven't already:
- Seed Capital Stage - The very beginning, your starting point, could be personal investment, or crowdfunding effort.
- Angel Investor Stage -That seed money will go quicker than you think because startups can will be financially draining, and a lack of funding is one of two major reasons startups fail, according to Paul Graham of Y-Combinator. Angel Investors will come in and provide that next boost as you move into new phases of potential growth helping you survive through the difficult early stages.
- VC Financing Stage - Once your startup has been deemed to have high growth potential, financing can be provided by firms or funds looking for a more formal and long-term partnership, along with an exit strategy for maximum financial gain.
- Get creative: There are a lot of different ways you can gain traction or proof of concept, but you might have to get creative about it. We use Amazon Private Label sales with our clients, to save money and to figure out quickly if we are onto something or not. Don't be afraid to get out there and go for it, because after all, isn't that what bootstrapping is all about? Figuring out ways to move forward with your existing resources.
Let's Not Pretend This Will Be As Easy As Reading About It
Judy Robinett, Investor, Advisor, and Author... all around expert on helping women get funded, understands the difficulties. A lot of women founders are unfamiliar with the funding ecosystem and landscape which creates a tremendous divide in attempting to actually get funding. If you couple that with not being able to strategically network to obtain warm introductions, failure seems more likely. For many women, this is reality, and a lot of it boils down to not knowing where to begin. That is why it is so important to plan, plan, plan. Do your homework going in, follow-up on every resource you can come across, go through each part of this series and familiarize yourself with the landscape, the language, the expectations, and the reality of what it looks like to get funded.
And last but not least, you always have to start with a solid/totally awesome/superior product or service. Nothing mitigates risk quite like serving up something irresistible.