Traditionally, women are paid less than men but also women entrepreneurs often times have difficulty finding funding for their startup business. Women only see about 80 to 85 percent of approvals for a loan and only earn 7 percent of venture capital investments overall.
Why It is Difficult for Women to Obtain Funding
Perhaps women struggle to secure startup funding in part because of the misconception that male entrepreneurs are more trustworthy in brining in returns because they currently dominate the market. Or maybe it is the fact that about 89 percent of venture capitalists are men, so men tend to favor men more. Either way, women are at a disadvantage compared to men when it comes to funding.
It can be difficult to navigate the funding landscape. There are lots of different funding types and without proper training and access to resources, finding the capital to help your business thrive can be tickly. It is hard to get the hang of it when you are still trying to learn the rules of the funding game.
There is good news, the number of small businesses owned by women has increased by 68 percent over the past decade. Women are bridging the funding gap. Here are some ways you can increase your chances of joining the ranks of successfully funded female-owned businesses.
Pitch the Right Way to Venture Capitalists
Entrepreneurs often fail to get the investments because they have not fully researched the best way to sell their ideas. It is important to determine who to share your pitch with and how to present your idea so that you will get the funding you need. You need to prepare and think like a venture capitalist. Investors expect a certain degree of expertise and high returns on their investment.
Make sure you do your research before selecting an investment firm to pitch for funding because venture capital firms specialize in different markets. Check to see what level of involvement potential venture capitalists have had with investments in the past, how familiar they are with the industry you are in, and which aspects of business they care about the most.
A venture capitalist that specializes in you are of expertise will be able to better help you get your business off the ground and can provide a great support system and industry advice as you grow.
Investing a chunk of your own money can pay off by learning pitching strategies. You can also read helpful articles online or watching videos instead of paying for a training seminar. Knowledge is key and it is the best way to walk into a pitch meeting with confidence.
Do Not Rule Out Government Contracts
While you are seeking funding, you can also check out government contracts because there are a lot of opportunities available. It can be trickier to enter into a government contract than applying for a grant. Grants provide recipients with funding for projects with few repayment expectations, while contracts generally require some sort of payout in the form of goods or services.
There are nonpartisan organizations now that are launched by the Small Business Administration (SBA) that make it easer for women to claim a portion of government contract money.
Apply for Specialized Grants for Women
There are many successful women entrepreneurs out there that are changing the game and revolutionizing their industries while filling needs that go overlook often times. There are many foundations and private organizations that have noticed this and are offering grants to specially women in business. When searching for women-owned business grants, remember to begin by looking within your own state. There might be specific grants available based on your location, so remember to do your research.
The Bottom Line
Whether you are just starting your business or have been around and trying to find funding but having difficult, you should learn all you can about how to pitch your business, seek out contracts and grants, and secure the funding that your small business deserves. You need to plan properly, research, and be dedicated so that you can find success in your business.