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Trends In Funding For Women In Startups

Mother’s Day is around the corner, and a lot of us are thinking about all the incredible work the mothers in our lives do. I would be remiss here to assume that being a mother is central to the lives of every woman, but in the absence of a day that adequately celebrates women across the spectrum I have decided to hijack Mother’s Day to examine some positive trends in the world of startups and venture capital where women are starting to flex some muscle.

 

 

Screenshot at May 08 13-45-51

 

The number of female-lead businesses is increasing. This is incredible to think about, but it doesn’t take away from the existence of a starting point which put women led companies at a massive disadvantage in securing funding in the earlier development stages. For the sake of perspective, female led companies only get 15% of the total capital being invested in early stage ventures. Unfair – yes, infuriating? Hell yes, especially when you take note of the fact that (according to the Kauffman Foundation) women led startups bring in 20% more money with half the money invested.

 

A case study in doubt

What do these statistics translate to on the ground? One recent post on StartupsAnonymous by a single mother embodies the reality some female founders face in this uneven market. Her post explains the agony and fear that goes along with putting financial security at risk while trying to make your dream a reality. This point highlights some of the more concrete forms of inequality that some female entrepreneurs have to confront.

 

“I am afraid to ask for credit for fear of raking in more debt, so I work at a snails pace by self-funding. How do I get over this massive fear of failure that is suddenly looming over my head? This is my dream and now I am overcome with fear with so many odds against me. How did you get over the hump if you were in a remotely similar or familiar situation?”

 

Whether this particular potential founder should be invested in depends on a lot of factors. Her fears could speak as much about how much she has to risk as they do about the challenges she faces in getting her idea off of the ground. But the question I found myself asking was how would these fears be different in a single dad? The answers might not be clean cut, but the question is one we need to keep asking ourselves as a community.

 

 

A success story

Sure, anecdotal evidence has its limitations but looking at success stories can do more than just make us feel better. They prove that surmounting challenges is actually possible. Take the story of Jessica Herrin, founder of Stella & Dot. Herrin found success by developing a model that empowered busy women to make money by utilizing a model called “social selling”. Jessica had already achieved success as a co-founder of WeddingChannel.com (she was on Oprah for god’s shake) so it shouldn’t come as a surprise that she didn’t pay attention to the haters that doubted her ability to make Stella & Dot a success while being a good mom to two young children.

 

I haven’t spoken to her kids, but her company brought in a cool $220 million last year. So I’m going to go out on a ledge here and say she made the right choice ignoring those nay-sayers.

 

More stories like these please

Investment in female lead startups is also rising, with big players like Kauffman Foundation and Plum Alley are helping in the fight to break up the boy club mentality in startups and investment firms. Plumb Alley was founded by a former finance executive named Deborah Jackson. She knew a few things about raising funds and decided to build a platform where women could launch campaigns to fund their ideas.

 

More and more organizations are realizing that female lead ventures deserve more thought. Not just from a moral or charitable standpoint but from a financial perspective too. This makes total sense and ties into the spirit or mother’s day nicely when you realize that the characteristics that make for amazing moms are also necessary for becoming successful founders. Motherhood is a full time job, that requires insane amounts of emotional intelligence, the ability to multitask for hours, and a super human amount of faith in your investments. That job description probably sounds pretty familiar to a lot of founders out there. Just saying.

 

Photo & Video Credits

Stella & Dot | Plum Alley

Author : Adam Corl

Adam Corl is a New England native with a passion for sarcasm, wine that tastes expensive, and keeping his parents questioning his life choices. This combined with a keen interest in organizational behavior and social science research has lead him to fund his nomadic lifestyle through freelance writing and research endeavors. When he is not writing about bootstrapping magic and project management tools you can find his stuff at The Bubble, where he is a staff writer.

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