Female entrepreneurs are getting creative with their funding efforts, but not necessarily by choice. According to a study conducted by Babson College, just 2.7% of venture capital-funded companies are female-owned. Probable influences of this statistic, include a lack of female investors, females operating lifestyle or service-based businesses not typically of interest to venture capitalists, females maintaining smaller growth goals for their businesses than males and simply fewer females asking for venture capital.
The obvious gender gap in venture funding places a great financial strain on female founders looking to develop a new business or scale an existing one. To bridge this gap and grow their ventures, women are finding alternative sources of funding. Here are a few examples:
Grants are an excellent, pressure-free source of funding as they do not require the entrepreneur to provide any form of repayment. The Amber Grant and the Eileen Fisher Women Owned Business Grant Program are examples of small business grant programs that focus specifically on providing funds to women-owned businesses.
Small Business Loans
The Tory Burch Foundation has partnered with Bank of America to create a loan program designed specifically for female entrepreneurs. The Tory Burch Foundation Capital Program connects female entrepreneurs with local community lenders, who directly provide affordable loans to established, female-led businesses.
Rewards, equity and debt crowdfunding are each attractive alternatives to more traditional small business financing. These fundraising formats require little to no up-front collateral and they allow female entrepreneurs to reach a broad audience of potential funders.
These examples are really just the tip of the iceberg. If you’d like to learn more about the many ways female founders are defying the statistics and securing funding for their businesses, listen to the podcast from our event — The Female Founders’ Guide To Raising Capital.
The discussion centers around the approach entrepreneurs can take to leverage the funding and resources available in Northeast Ohio, including female-specific programs and capital options.