According to a recent U.S. Senate report, women business owners receive just 4% of the total value of small business loans and only 7% of venture capital funding. Fundraising can be an ordeal for any small business or startup founder. But it’s no secret that female founders face an especially steep climb.
That imbalance won’t be corrected overnight, but a few developments are at least starting to make the fundraising landscape more favorable for women business leaders. Not only are more women venture capitalists and angel investors bringing their expertise and assets into the market, the rise of online crowdfunding platforms is giving women-led businesses more options.
I reached out to two women investors to get their thoughts on how female founders can successfully hit their fundraising targets. Here’s what they had to say.
1. Find Your Cheapest Money First
Before you start looking for a bank loan or investment, consider options that won’t cost you interest or ownership, says Trish Costello, founder of equity crowdfunding site Portfolia and CEO emeritus of the Kauffman Fellows Program at the Center for Venture Education. Well-known platforms like Kickstarter and Indiegogo can help startups raise capital and build buzz around your company, and they don’t come with as many strings as traditional funding sources.