Venture capital destined for women-led start-ups? So rare. From 2011 and 2013, only 3 percent of VC-capitalized companies had female leadership.
Female venture capital is out there.
Finding funding for women-led business is becoming easier. Why? In part, women are funding creatively, as with the new successes in crowdfunding that Geri Stengel notes in her recent post for Forbes.
It’s also the influence of women-led VC firms.
Here’s what female founders and woman-led venture capitalists suggest for raising venture—
- Look to Your Relationships
Find funding among your contacts. Nicole Sanchez of Vixxenn, a start-up with rocketing sales, advises: “invest in relationships, seek people for advice and not funding, and you’ll build the relationships that will make you well positioned for a raise.” Aileen Lee knows “there’s huge value in the experience and the cultivation of strong working relationships.”
- Lead with your Credentials
Know what you have going for you. Remember you’re a fighter, you’re smart, and you know your business. Talk about your successes and strengths. These credential you. For Jessica Richman, co-founder and CEO of uBiome (which raised $6.5 million last year), this is key in pitching: “let them know that you are a former wrestler, that you traveled around the world by yourself, that you started a company in high school, or whatever you have done that they will think is badass.”
You talk to people. You hear no. You hear a lot of no. But as Jessica Richman advises, you can’t stop talking. 50 rejections? That’s about a sixth of the way through your approaches. Pitch and pitch again: listen to what investors are saying, but keep pitching. Fern Mandelbaum of Monitor Ventures knows it can be discouraging to hear so much no, but “remember that you will raise money. It may take a little longer, but it will happen.” Fundraising’s not a sprint. It’s a marathon. Keeping the pace is everything.
- Be Confident! and Passionate!
You think you start your ask with money, because money is the point. But no. Start with your passion instead. Show you believe in your product. Aileen Lee of Cowboy Ventures suggests that founders incorporate in their pitches just what makes them passionate about their start-ups. No one wants just to feel sure the company will be profitable. Everyone’s interested in why you’re investing. Are you a visionary or a mercenary? That’s important when in deciding whether or not to invest.
- Know What you Want from a Partnership
Finding fit is crucial. The right partnership for the right reasons. “Do you want partners who are going to help with strategic and operational issues or partners who will let you run the business and stay out of your way?” asks Mona Bijoor, founder of JOOR, a wholesale fashion marketplace. “There is merit to both, but knowing what you want before you start to raise capital will help you to not be disappointed with the outcome.”
- Consult Other Founders
In spaces like the Female Entrepreneurs Institute, you find other founders. Talk about funding with them. Maybe they’ve already done it. They might know someone, some inside line, some strategy you haven’t thought of. As Fern Mandelbaum advises, find other entrepreneurs, ask about their process, get tips, make relationships.
- Know your Business—and Your Audience
Fern also believes you should “learn as much as possible about the VCs you will be pitching. Pitch VCs who understand your space and who will add value. Know your business inside and out. Product market fit is key. Be a good listener, answer questions directly. Have a clearly articulated business model. Understand the financials.” As Umaimah Mendhro, founder of VIDA (a mindful, global citizenship e-commerce company that just found $1.3 million in seed funding) says, you should “only raise money when you know people actually want what you have to offer and the market is ready for it. It can be easy to think that people will want your product simply because it’s your product, but this isn’t always the case.” Know your product, but know your business, too.
You have to ask. Umaimah stresses that women, because of gendered expectations, might have more trouble just—asking. “There’s this idea that we [women] don’t ask to get a higher salary. We don’t tend to negotiate. Statistically speaking, we tend to kind of feel that, if we’re doing a great job, it will be recognized.” But that isn’t how it works. “When you’re fundraising, you’re having to go out, ask for money, and know that you’ll be in an uncomfortable position because not everyone is going to think your idea is great.”
Female founders are funded, according to Geri Stengel for all the right reasons: they “outperform men because women have the skills, including project management, marketing, storytelling, meeting milestones, being frank when mistakes happen, and communicating clearly—without jargon, with realistic revenue projections and words that align with actions. Of course, they are also excellent at followup.”
Women are trending. And successful. “By being more visible and showing we can do this,” Theresia Gouw of Aspect Ventures says, “maybe women will become more confident to be entrepreneurs and investors themselves.”