Although the gender gap still exists in the business world, recent years have seen more women coming to the forefront. The world over, women are getting ready to put on their entrepreneur hats and conquer the marketplace. But a simple truth remains: Starting and maintaining a business requires capital. How does the modern businesswoman find funding for the modern FinTech business? Well, there are options and that’s what we will look at this week.
Any business owner will likely have to explore the option of the business loan, and this is a viable option. There are even companies that specifically offer business loans for female entrepreneurs. Kabbage, for example, recognizes the difficulty women often face in the business world and have tailored a loan process to better meet their needs. As well, there are government agencies and nonprofit organizations that offers grants to entrepreneurs (for example the InnovateHER Challenge) and these can definitely help get the business going. A good mix of grants and loans can be the best route to successfully launching your business.
Venture capitalists are one of the major ways entrepreneurs fund their businesses. That being said, studies show that, when looking for support from venture capitalists, women have a tougher time. In fact, according to Fortune Magazine female entrepreneurs receive about 2% of venture capital funding. This is an area where the effects of the gender gap are quite evident: Female venture capitalists are more likely to invest in female entrepreneurs, but over 90% of venture capitalists are male (source: New York Times). For women seeking venture capital to fund their entrepreneurial aspirations, it’s a tough and uphill battle.
When it comes to funding sources, where women have been shown to succeed is in the field of crowdfunding. In fact, studies show that crowdfunding projects led by women both collect more money and are more likely to reach their targets. What does this mean? Women seeking funding for their enterprises should make sure they explore the crowdfunding option. The options are plentiful by this point and there are even crowdfunding platforms specifically designed for businesswomen. Collectives such as iFundWomen and Women You Should Fund give entrepreneurs a set audience to pitch to, expanding their exposure and their chance of finding backers.
Women across the globe are setting out to conquer the business world. This is incredibly important, as the female voice is needed in the boardroom and the marketplace. Sadly, starting and running a business requires capital and any women hoping to join the list of successful entrepreneurs need to know the best places to find funding. The good news is that the modern financial world offers options to aspiring entrepreneurs. Know the best places to look and your business will be on the right path to success.