"The most courageous act is still to think for yourself. Aloud."- Coco Chanel, Founder of Chanel
Female founders face unique challenges when it comes to securing funding for their startups. Studies have shown that female-led startups receive less funding than their male counterparts, which can make it difficult for women to launch and grow successful businesses.
The good news is there are several strategies that female founders can employ to increase their chances of securing funding:
- Seek out investors who are committed to diversity and inclusion: Some venture capital firms and angel investors have made a commitment to investing in diverse founders. Female founders can research these investors and seek them out specifically. So do your research. Before approaching any potential investors, it's important to research their track record of investing in diverse founders. Look up the investor's portfolio companies and see if there are any women-led or minority-led businesses that they have invested in. If they have a track record of investing in diverse founders, then they may be more willing to invest in your business.
- Build a strong network: Networking is key in the startup world, and female founders can benefit from building a strong network of mentors, advisors, and other entrepreneurs who can offer support and guidance. This network can also provide valuable introductions to potential investors. Check out our blog post: How to build the ultimate network.
- Participate in accelerators and incubators: Accelerator and incubator programs offer mentorship, resources, and funding to startups. Female founders can seek out programs specifically designed for women or that prioritize diversity and inclusion. One thing you can do is reach out to alumni or mentors from the program you're interested in to learn more about their experience. This can help you understand the program's strengths and weaknesses, and give you insights into how to prepare for the program.
- Consider alternative funding sources: Traditional venture capital funding may not be the best fit for every startup. Female founders can explore alternative funding sources, such as crowdfunding or grants, to support their businesses.
- Focus on building a strong business: Ultimately, the most important factor in securing funding is building a strong business. Female founders should focus on building a solid business plan, developing a strong team, and demonstrating traction and growth potential to potential investors. Check out our blog post: How to execute the ultimate business plan.
Platforms available for female founders
There are several platforms available for female founders to raise money for their startup.
One option is crowdfunding, which has been shown to be successful for female entrepreneurs. According to research by ESMT Berlin, women are actually more successful at crowdfunding than men. Amanda Palmer, Hannah Kromminga, and Luisa Dantas are examples of female entrepreneurs who have made significant sums of money on crowdfunding sites.
Another option is the Female Founders Fund, an early-stage venture fund that invests exclusively in female-founded companies. The fund has received $57 million in its third round of funding, which concluded in July 2021, with investors including Goldman Sachs and Melinda French Gates.
The Amber Grant Foundation is another resource available to female entrepreneurs, which awards $10,000 to a female entrepreneur each month, with one of the 12 grant winners receiving an additional $25,000 each year. The foundation was organized by WomensNet in 1998.
Raising money for female founders is no easy feat, but it's a journey that requires persistence, preparation, and a strong network of supporters. To increase your chances of success, focus on finding funders who support diversity, prepare a strong pitch that showcases your unique talents and strengths, and consider leveraging crowdfunding and non-traditional sources of funding. But most importantly, stay persistent and keep pushing forward, because the road to success is never easy, but it's always worth it.