Tips for Women Entrepreneurs to Successfully Raise Funds

Tips for Women Entrepreneurs to Successfully Raise Funds

626 352 Sovina Taneja

To put it simply, successful fundraising can determine your company’s future in its early stages of growth. It is with great passion, determination, and hard work that women have made their way into the world of business. However, rising to success is made difficult when the only ¼ of the Singaporean Business scene is made up of female business owners. For the handful of women who make it to the top, it is not uncommon for them to face a host of issues regarding obtaining investments for their company.

Outdated Viewpoints

Even in today’s modern century, it is unfortunate that women have to fall prey to social norms and gender roles. These outdated ideas that women only work as a hobby or treat it as part-time jobs are the reasons why investors hesitate to collaborate with perfectly intelligent, capable, and committed women. In 2019, a report by HSBC stated that almost half the female entrepreneurial workforce worldwide is commonly questioned regarding their credibility, family circumstances, or personal questions – an obvious gender bias. A still outdated and institutionalized issue that faced women entrepreneurs is their perceived priority to familial duties, indicating a priority for work over family. Arpita Ganesh can’t remember the last time an investor didn’t ask about her family or the number of children. She’s not sure why people don’t realize that women, too, know how to prioritize their businesses.

On the other hand, when women are an integral part of the business, they are often dismissed or undermined. According to the CEO of Moms Co, Malika Sadani, when pitching to potential investors, they would often pay more attention to her male counterpart regardless of her preparation and knowledge. Bandana Kaur, Co-founder of Inspired Snacks in Singapore, feels she has to prove herself 10 times more than a male colleague or entrepreneur. As her effort, education and competence are undercut by many. 

Challenges that women in the business world face aren’t limited to stereotypes and gender bias, but extend outward to the types & quality of available resources. The importance of connectivity, sharing your platform, and networking have become countless – but women aren’t even given this basic right. The entrepreneurial community does not give women the necessary advice or full access to collaborative platforms. It is not sensitive to the responsibilities that women have to carry aside from their business. Here is where Elizabeth Wu, co-founder of Trehaus in Singapore, questions the concept of co-parenting and the ability to share familial responsibilities. She wonders why society is still unable to understand that juggling & raising kids and growing a business has now become a shared task that can be undertaken with a partner.

Source: Freepik

An Opportunity Indeed

It’s just as important for SMEs and larger companies to put their women employees at the forefront in major leadership positions. Just looking at the staggering gender gap amongst venture capital firms is proof enough that lesser women receive funding opportunities today. Perhaps if strong women come together to collaborate, this may translate into more opportunities and a great deal of growth on both fronts. Francesca Warner from Diversity agrees that the absence of women in VC firms has a profound impact on female-led companies that seek funding. She claims that there is a significant unconscious bias in the investment decision, which puts female founders at a disadvantage. At many ventures today, it’s important to maintain at least one female founder. Crunchbase was able to break this down to find that VC’s with a comparatively high composition of female partners, such as NEA Ventures – has a longstanding history of funding female founders. This representation builds up the platform for female entrepreneurs to obtain funding to ensure their start-ups or small businesses’ survival.

Besides, women entrepreneurs bring a more credible skill set to the table. In addition to their competency and qualifications, the unique perspectives and understanding of a woman can significantly add to the company’s growth and productivity. Women tend to be more analytical and critical, providing more accurate numbers and projections while presenting their pitch. Investors tend to appreciate knowledge in the market and business but also account for the investor’s personality and intrapersonal behavior. It is important to begin to normalize the diversity of perspectives and the ideas women bring to the world of commerce, shifting away from a primarily male-dominated view. 

Read Also:Challenges faced by Women-Led Businesses to Raise Funds

Lets look at some simple steps that will help women to start a fundraiser for her company.

Building Bridges

One of the biggest lessons in life is to make and leverage connections, maintaining relationships, and building a solid networking foundation. Networking provides you the best chance to explore and begin building an ecosystem of like-minded entrepreneurs and angel investors that understand and respect your leadership and talent as a woman. But do not forget to do your homework – what are the best sources of capital? What are their backgrounds, and what kind of opportunities do they invest in? Not only do research on investors but also make sure you brush up on your own business, as investors like to put their money into someone who has clarity in their business model and goals. You do not need to pitch to every investor, instead do your research and look for companies that suits well for you and your business. A great place to start would be to explore the opportunity to pitch in front of female-focused angel groups (even though we recommend you should stay open to all pitch opportunities). This advice also holds for more diverse angel groups and VCs that understand and represent the world in which we live.

Unfortunately, as we find that men invest in men, let’s not worry because this means women can invest in fellow women just the same. Now, this doesn’t mean that females should back down from the opportunity to pitch and impress a male investor, it’s just important to seek out firms with a history of investing in women founders, to ensure that you are given the time & attention you deserve.

Just as important as networking and female-friendly investment opportunities are, the most important goal is to remain true to yourself and your goals – and therefore learning and choosing the right partner is vital. Make sure to put in the appropriate time and energy into researching fund history, and studying how investment opportunities align with company goals. It’s never a downside to be unique in your approach because your end goal is to develop a roadmap leading towards success for all stakeholders that play a part in what you do.

Source: Freepik

Adequate Preparation

Apart from the pressure that comes with trying to gain fundraising opportunities to keep your business thriving and the fear of rejection perhaps because of your gender – it’s best not to forget the importance of being adequately prepared. At the end of the day, accessing funding requires a strong pitch and the right attitude to ensure the investor can accurately determine whether your company is worth investing in.

Apart from knowing your own material and having a deep understanding of your companies future projections, the team should be aware of what is happening in the industry, what the economic trends are, and how your business will evolve across the coming quarters. It is important to outline how the investor’s money will be used and the outcome for the business, highlighting areas that you require and what issue you are addressing with that investment. Make sure this issue solves a long-term problem that allows the company to grow and operate without hindrances. Moreover, investors typically prefer to invest in companies that provide an exit strategy, as it provides contingencies for the investors in case things go south. Carefully constructing an exit strategy and adding contingencies into your pitch can make it more appealing to an investor, showing them that their money is protected.

Obtaining funding is really about being the best person to sell your idea to an investor. The idea is that you, as an entrepreneur, know your company and what it stands for, making you the best person for the job. Just don’t forget to continue to improve on it and keep practicing the pitch. Be prepared to answer dynamic questions, because you need to change just as fast as the market does. If the opportunity arises, see how others go about the same task and try to take some pointers. This could be through online events & corporate forums, or even popular television shows like Shark Tank!

Read Also: Women driving Global Leadership to New Heights

Women Must Take The Lead

Although there’s been a lot of chat happening as to how women are fit into preconceived roles and aren’t given the opportunities they deserve. But now it is time to take charge as a woman because the present-day profile of a venture-backed entrepreneur is changing with the times. Heather Hartnett, CEO & Partner at Human Ventures, talks about how being a founder today involves a certain number of skills & problem-solving capabilities ranging from dealing with day-to-day human problems to forming a company culture and having the expertise to build a team to beat your competition. These skills need to be highlighted to the investor, as they are investing in you and your idea, as opposed to simply a business. Investors tend to look at the entrepreneur first, and so it is a great opportunity to showcase the special skills that come with being a woman entrepreneur. 

The ultimate goal is to remain confident, thereby overcoming inevitable obstacles that may come your way. Be comfortable as a woman, and be confident as a woman entrepreneur. If anything, it’s an opportunity for you to stand-up and differentiates yourself from others in the room, even if it feels overwhelming. Not only try to promote your business idea but also highlight your needs as an entrepreneur and what you feel like is the best for your company. Stand your ground when stating your preferred investment type (i.e., equity or debt) and be ready to justify your company’s valuation. Practice will make you articulate, and a well-rounded pitch will ensure that you can lead & take charge of the target goals. 

Look for Other Avenues

Often, the direct and standard route may not be the ideal route for you. Allows have a plan B & C while raising funds. In case venture capital fundraising route doesn’t work out, crowdfunding can be an alternative. On average, Pricewaterhouse Cooper found that seed crowdfunding ventures led to a little over 10% in pledge dollars for women. It goes to show that a different arena like this is perhaps more gender-neutral and acts as a true picture of a level playing field.

The concept behind crowdfunding is simply appealing to the mass public and showing them why your product is unique and what problems it can solve. Crowdfunding seems to be a more effective means of raising money as you may come across people who relate to your values and can see the potential in your company. Crowdfunding allows you to connect with the public on a deeper level, using more emotional means of pitching. If your company is solving a problem or addressing a huge gap in the market, use the public as your force of growth. These public members are most likely to become your customers, allowing you to build a sustainable relationship with them in the long-run.

Source: Pixabay

Building Your Squad

Building a team of hardworking professionals that compliment your company is an essential base for steady growth. The people you work with are the differentiator between a single product or service and a company. Having qualified and passionate employees reflects to the investor that the company has the credibility and ability to get the results they want. A pro-tip; hire people who are more qualified or experienced than you, as this will push your boundaries on management style as the company grows. These employees will be your base, so it is imperative to gather a team of strong individuals who can work cohesively and effectively.

Beyond constructing your core team, it is important to maintain and work to improve the employee-workplace relationship. Valuing the employee’s input, providing equal opportunity, and conducting team-building activities can significantly contribute to organic growth in the future. Employees are similar to a lifelong investment, it may cost a lot in the initial stages, but the more you nurture and respect them, the more they will give you in return.

Road Ahead

Excitingly enough, a little over half of the women in Singapore today have been able to secure the total funding they sought successfully. It means that things are visibly improving! Yet, a long way to go is to refine the process to be void of gender stereotypes and focus on the achievement & efforts of the entrepreneurs, as opposed to holding them at a double standard.

Sovina Taneja

Sovina Taneja is a final year student at the University of Hong Kong. She majors in Food & Nutritional Science with a minor in Kinesiology. She has a keen interest in the field of Sustainability & Food Waste and also, keen on spreading awareness about its link to the private sector. When she is not working, you can find her at the dance class or soaking up some sun at the beach.

All stories by:Sovina Taneja
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Sovina Taneja

Sovina Taneja is a final year student at the University of Hong Kong. She majors in Food & Nutritional Science with a minor in Kinesiology. She has a keen interest in the field of Sustainability & Food Waste and also, keen on spreading awareness about its link to the private sector. When she is not working, you can find her at the dance class or soaking up some sun at the beach.

All stories by:Sovina Taneja

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