Breedlove's Briefing: How Female Founders Can Crack the Funding Code

May 6 - Stephanie Breedlove

Hi! I’m Stephanie Breedlove, Co-Founder of HomePay, Author and Angel Investor.

I absolutely adore taking an idea and giving it life in the form a business, then leading it to its full potential. Nothing is more fun. (Seriously!) I’d love for every woman who wants to start her own business to say the same thing, so here I am, mentoring millennial entrepreneurs. When I’m not working, I like to recharge and head outdoors to hike, bike, or stand up paddle board!

Is that list of business news and trending articles you’ve tagged still unread? I get it. Allow me to help. Take a couple minutes to read my summary of articles serving the most pertinent, actionable business topics. Or, take 10 minutes to read the full article, and put another brick on the foundation of your growing career.

This Week’s Must-Read:

How Female Founders Can Crack the Funding Code

Who it’s for:

Female founders who are raising funds or know they may need to in the future. (So, pretty much all of us).

Why it’s important:

Less than 2 percent of venture capital is awarded to female founders. When a woman is selected to pitch to investors, she’s typically asked prevention questions that facilitate a discussion involving risk management and worst-case scenarios. Men, on the other hand, are typically asked promotion questions that focus the conversation on upside and growth.

How can women play a pivotal role in eliminating today’s pervasive unconscious bias? Judy Robinett provides a roadmap in her new book, Crack the Funding Code. Here’s the scoop:

Understanding what investors want is essential to successful fundraising. Equity investors fund 1 to 4 percent of the deals they see. Yes – that’s less than 5 percent! You must package your business to make it easy for funders to say yes.

The process is not just about convincing the investor you have the right stuff. It’s about improving the likelihood that your startup will succeed by thinking strategically about every aspect of your business, and by getting the feedback and expertise you may lack.

One way to increase the probability your pitch will sell is to participate in an accelerator program - such as DreamIt Venture, Capital Factory or Springboard Enterprises - to increase the chance of survival from an average of 20 percent, to 80 percent or more. These programs provide training, peer support, mentorship, and access to investors and experts.

With or without an accelerator, you need to cultivate relationships with investors on your own. Most early-stage investors won’t even look at your plan or take a meeting without a referral from someone they trust. Know that investors fund passionate founders who are competent, committed, credible, convincing, confident, and coachable.

It’s critical to have the right tools for success. Several categories of tools are essential:

  • Financial Tools: Historical financials and credible future projections are vital to getting investor buy-in.
  • Business Tools: Every startup needs an executive summary and a quality investor slide deck, for both presenting to and following up with investors.
  • Marketing Tools: Make sure you have a polished elevator pitch: for email introduction, casual conversations, and formal meetings.

As a woman, you have to be prepared for investor questions that will focus on prevention or loss. The key when answering is to flip the focus of your response: Yes, you have to answer the prevention question, but you should add a promotion response, as well. This strategy will allow you to raise 14 times more funding than those who don’t.

Employing these methods will generate investors who want in on your deal. Having investors is a little like getting married, so do your due diligence on them:

  • Does the investor share your vision for the business?
  • Will they contribute to the success of your business?
  • Will they be valuable when you face issues?

Top Take-Away:

In the evolution of women in entrepreneurship, funding barriers stand in the way of parity. Learn the barriers, and build a roadmap that allows you to see the obstacles ahead and to navigate them successfully. How you prepare for your fundraising journey matters. Are you ready?

Be better prepared for funding barriers with the wisdom from these articles:

Male and Female Entrepreneurs Get Asked Different Questions by VCs – and It Affects How Much Funding They Get

Why Female Entrepreneurs Get Less Funding then Men

Women Entrepreneurs Are Financially Underserved – Time to Change That

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