Yeesh. Women outpace men in new businesses about 2 to 3. Latina women in particular are entering entrepreneurial ranks full speed ahead, outpacing every other demographic group.
So why the heck are women losing ground in the venture capital pool? Less than four percent of venture-backed companies are headed by women, the lowest in ten years.
Four percent.
It’s not much better for angel investors. Only ten percent of angel money goes to businesses headed by women.
As I said, yeeeeesh.
It’s not that the money isn’t there. On the contrary, there are billions and billions of dollars in new venture capital funds and new angel groups. I track those funds, and I know there is a lot of money there.
So how come women aren’t getting their fair share?
The simple answer is that venture capital and angel investment firms are run by men.
More importantly, what can we do about it? While there isn’t a magical answer, there are some real steps that women can take to make their companies a success.
1. Bootstrap the company. Well over 90% of all companies are still bootstrapped, financed by the owners. Male, female, Hispanic, disadvantaged – it makes no difference. This is still your best way to finance a company.
2. Incorporate. If you take your business seriously, others are more likely to do so too.
3. Create a strong Advisory Board. Few things say as much about your company as who chooses to put their names on it. A strong Advisory Board drawn from the industry, comprised of men and women, is a huge asset.
5. Create a strong business plan. Remember, the business plan isn’t meant to sell the business – it is meant to sell you. Your abilities, and those of your management team, are the real key to a strong business plan. Everything else is secondary.
6. Network like your life depended on it, for in truth, your business life may well depend on your contacts.
7. Create a commanding presence on the internet. The next generation will find its success anchored on the internet. Be there.
8. By-pass traditional sources of funding and go straight to corporations. Many corporations have venture capital arms with the sole purpose of identifying and promoting technologies in their fields. And, there is money in those venture capital arms right now.
9. Promote your business before it ever becomes a business. Pre-publicity can bring you to the attention of finance people in your area, and at the very least can begin to create buzz about your business.
10. Don’t shy away from “women’s businesses”. There’s a lot of money in those pocketbooks.
Yes, it is still very possible that you can have the business of your dreams. It is happening every single day for thousands of women.
By the way, did you know that about eighty percent of the venture capital funded businesses fail? Without doubt, the businesses begun by women have a much better batting average than that.
Go for it.
MaryAnn Shank, the force behind Business Plan Master , battles financing for women every day. In spite of the huge obstacles, she sees more and more women succeeding every single day. |
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