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Finding Funding

Here’s What You Should Know When It Comes To Startup Funding For Women

Women founders have insufficient access to startup funding. How do we bypass funding hurdles? We take a look at current trends and possibilities and also give you a head's up on a few women in venture capital looking to invest in other women.

According to a 2017 report by the U.S. Senate Committee on Small Business and Entrepreneurship, whose ranking member is Senator Jeanne Shaheen (Democrat, NH), there are an estimated 11.6 million women-owned businesses in the U.S., representing 39 percent of all for-profit companies. Women-owned businesses employ nearly 9 million workers and generate more than $1.6 trillion in annual revenue. Women are launching businesses five times faster than men; but, women-owned companies earn less revenue than those owned by men and their market share and revenues grow more slowly. So, what’s happening with our startup funding?

The most recent census (2010) recorded that women constitute 50.8 percent of the U.S. population — why don’t we own and operate more businesses and most of all, why aren’t our companies more robust? Cultural traditions, few influential mentors and insufficient access to capital pretty well sum up the shortfalls.

Throughout history, women have been productive and resourceful workers. Yet, cultural expectations and practices have relegated us to low-paid, low-status work. As a result, women’s entrepreneurship has often meant hawking fruits and vegetables in open markets and earning very little money.

The needle hasn’t moved much in so-called enlightened Western society. Unequal access to C-suite and other leadership-level employment has left women with a stubborn gender pay gap that undermines bank accounts and credit worthiness. Women often face limitations when attempting to either self-finance or obtain a loan for business growth and expansion, because it takes money to make money and women have less.

Furthermore, women have fewer role models and mentors to provide visible signs of yes-you-can success that provides inspiration and guidance to aspiring entrepreneurs. We don’t have the support system that encourages risk-taking and it undermines our ability to launch and lead successful ventures.

Crunchbase, the startup database, reported that globally, 43,008 venture capital-backed companies were founded between 2009 and the first quarter 2017 and 6,791, or 15.8 percent, of those startups had one or more women on the founding team.

The Crunchbase report showed that in 2016, startups founded by men received a total of $94 billion in seed investment fundraising and startups that had even one woman as a founder received a total of $10 billion. Startups with one or more women founders raised 19 percent of all seed investment rounds, 14 percent of early-stage venture rounds and 8 percent of late-stage venture rounds.

Consider those statistics another way. Startups whose founders were men received 81 percent of seed investment funding that was handed out, 86 percent of early-stage venture rounds and 92 percent of late-stage venture rounds. All-male founding teams received $84 billion more seed investment capital than founding teams that included even one woman.

Ladies, let’s take this matter into our own hands. As it’s been said, power is not given; real power is taken or created. We must rise to the occasion and leverage the power that we own. The time is now.

Women (and men) in leadership positions are asked to pay it forward and mentor women.

Here's What You Should Know When It Comes To Startup Funding For Women - Lioness Magazine
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A November 2014 report by the Ewing–Marion Kaufman Foundation states that women have few advisers who can direct them (us!) to networks or organizations that can help them to start and grow successful businesses. A September 2013 report by the Small Business Association found that mentorship is closely linked to small business success. Owners who receive three or more hours of counseling a month report higher revenues and employment growth than those who receive no business counseling.  

In the office, department heads can ensure that female staff members receive skills and leadership development training that position them for career-enhancing projects and promotions. Skills acquired in the workplace are the skills that we’ll apply to building our own ventures at some point, if we choose.

Female (and male) leadership team members and department heads must close the gender pay gap.  In 2016, women working full-time were on average paid 18 percent less than men who performed the same or similar work, according to the Bureau of Labor Statistics. The earnings difference begins very early in a woman’s career and it increases over time. Women at age 25 typically earn 89 percent of men’s earnings at that age but by age 45, women earn only 78 percent as much as men. The majority of the pay gap originates in the withholding of merit increases and promotions and it is impacted by time off and other accommodations linked to motherhood.

Female job candidates and employees can shrink the pay gap by negotiating for higher starting salaries and raises that reflect their expertise. Negotiating begins with knowing your value to the organization and in the employment marketplace.  Consult an online source to learn what workers with your job title (or would-be title) earn in your industry and locale. If your current or prospective employer balks at your proposed compensation, consider backing off 5 percent-10 percent in exchange for a more desirable job title and strategically useful learning opportunities.  

The Crunchbase report noted that a growing number of angel investor and venture capital firms are led and funded by women and those firms welcome women entrepreneurs who seek investment capital for their enterprises.

List of Women Funding Women

Aspect Ventures: Theresia Gouw, Founding Partner

Companies: Trulia, The Muse, software, security technology                                                                                              

Kleiner Perkins Caulfield & ByersMary Meeker, Partner

Companies: Airbnb, Spotify, Twitter

Forerunner VenturesKirsten Green, Founding Partner

Companies: Birchbox, Bonobos, Dollar Shave Club,

Spark Capital InvisionMegan Quinn, General Partner

Companies: Slack, Square, Slack, Uber

Fairview Capital PartnersJoAnn Price, Managing Partner

Companies: Groupon,

Andreeson HorowitzMargit Wennmachers, Partner

Companies: Amazon, Autodesk, Facebook, Netflix, Yahoo

Approaching Investors

Prepare yourself and your venture in advance of approaching potential investors. Research funding possibilities and determine what will be most advantageous for your circumstances: angel investment, venture capital, or crowdfunding. The Small Business Administration Venture Capital Guide provides a detailed overview of investment options. Next, research the industries that your wish-list investors typically fund, if you will pursue angel investment or venture capital.

Developing a comprehensive business plan is a must. SCORE, the SBA-affiliated mentoring group that is staffed by retired executives has a business plan template that you’ll want to see.

Finally, you’ll create your investor pitch. Two questions you should be prepared to answer are:

  1. Will the investor make a good return on investment if s/he funds your venture?
  2. When will that happen?

You’ll need a pitch deck, 15-20 PowerPoint slides designed to showcase your company’s management team, product line, technology, market share potential, target customers, sales potential, key competitors, business model and financial data.

Use the slides to present an overview of your company, the growth and expansion plans and projected funding needs (the ask). You needn’t present minute details, that information can be shared in a follow-up meeting. But know your information (including those deep-dive details) so you won’t be caught off guard if a potential investor isn’t interested in the slides, but would rather ask you a few questions.

Judiciously include visual elements — charts, graphs, a management team photo and product photos, primarily. You would be wise to hire a graphic designer to create your pitch deck and a professional photographer to create all photos.

Send your pitch deck slides in PDF format when invited to meet with potential investors and avoid Dropbox or Google Docs, services that they may not use. Include at the bottom left of your pitch deck cover page the following legal language, for your protection: Confidential and proprietary. © by (company name). All rights reserved.

Thanks for reading,


About the author

Kim L. Clark

Kim L. Clark is the founder of Polished Professionals Boston, a business strategy and marketing consultancy. She is also an adviser to small business owners and develops workshops and classes that provide instruction in writing business plans. Kim has lectured at the Lesley University Seminars, the Boston Chamber of Commerce and the Cambridge Chamber of Commerce.

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