Attorney & Creative Capital Queen Jenny Kassan talks about why Venture Capital models are not the right way for 99% of businesses to grow. Join the #WeEconomy and find investors for your business who love you, believe in what you give to your community, and want to see you be successful!
Here are some signs that you are in the Bootstrap Trap:
- You are using personal credit cards to pay for business expenses
- You have or have seriously considered doing work outside your business to pay your expenses (consulting gigs, freelancing, driving uber, etc.)
- You have taken out a second mortgage or home equity line of credit to pay for business expenses
You know you need support like a bookkeeper, web developer, administrative assistant, etc., but you can’t afford it so you do all of those jobs yourself
- When you do get outside help, you always go for the cheapest option even though the quality is not up to your standards
- You desperately need some new equipment or supplies to be able to run your business effectively but you can’t afford to buy it or you buy the lowest quality version of what you need
- You aren’t paying yourself a salary
- You’re using unpaid interns which can put your business at risk (this could be a violation of labor law)
- You know your business would grow if you could hire a sales team, professional marketing support, or some other kind of support, but you simply can’t afford the things you need that would help your business grow
How many of these are true for you?
Should you continue as you are and keep hoping that you will finally get enough revenues to be able to do all the things you want with your business?
If you have been trying to reach that goal for a while and you keep falling behind, it is time to acknowledge that a lack of resources is making it impossible for you to have the business you want. You are in a vicious cycle – without upfront resources, you can’t buy what you need to create a business that generates sustainable revenue.
If you need help escaping the Bootstrap Trap, take my new course, Escape the Bootstrap Trap 30-Day Challenge. You can start today!
By: Jenny Kassan and Amrita Sankar
The capital raising landscape can be extremely challenging for female entrepreneurs to navigate. We have both seen this challenge time and time again through our professional experience: Jenny has spent over two decades as an advisor to start-ups attempting to raise capital, and was curious why, when focusing on female entrepreneurs, there seemed to be a fundraising gap. Amrita has worked for the past several years in the impact investing industry as an Investments Associate; and while impressed with the new products and services targeting gender lens investing, she has still felt frustrated by the challenges female entrepreneurs face accessing capital.
We attempted to find empirical research about why female entrepreneurs are less successful raising capital, but unfortunately, we found that there are few studies that focus on this subject. While numerous studies have indicated the positive benefits of investing in women, or promoting women to positions of leadership, none of the studies we found address the nuanced question of why women entrepreneurs generally raise less capital and at a slower rate than their male counterparts. The literature that addresses this issue at all focuses on raising funds through venture capital, but this source represents just a tiny percentage (estimated at one-tenth of one percent) of the full array of fundraising options that are available.
Amrita talked to experts in the field of women entrepreneurs raising capital, such as Alicia Robb of Next Wave Ventures and Nancy Hayes of Golden Seed Investors, and they agreed that there is a lack of research on this topic, especially outside of the venture capital realm.
We set out to begin to gather data from women entrepreneurs about the challenges they face when raising capital. We interviewed women that had worked with Jenny to raise capital. Admittedly this group may not be representative of women entrepreneurs in general since they have been steeped in Jenny’s approach to raising capital. However, they do represent a diverse group in terms of geographical location, industry, age, and stage of business.
We heard very similar themes repeated over and over in our interviews of the women entrepreneurs. The comments we heard can be roughly divided into three categories: (1) challenges created by women’s own beliefs and mindsets; (2) challenges created by lack of knowledge of the options for business funding; and (3) challenges created by biases that exist in the world of business and finance. Of course, these challenges are very much interrelated because external biases can cause women to have more fears and self-doubts and women’s limiting beliefs and limited knowledge can exacerbate external biases when women appear less confident in investor meetings.
Women’s Limiting Beliefs
Based on our experience and interviews (unfortunately not a large enough sample to draw any definitive conclusions, but suggestive for further research), women entrepreneurs appear more likely than men to hold beliefs about themselves and their businesses that make it more challenging to raise capital. Examples of the kinds of things we hear from women are
- I’m not ready to raise capital (many women think everything about their business needs to be perfect before they can ask for investment)
- I’m not qualified to raise capital (women have an image of what kind of business is “eligible” to raise capital and they assume they don’t have it)
- I can’t guarantee I’ll be able to pay investors back (women seem to think it is only okay to offer an investment opportunity if the return on investment can be guaranteed, which of course is not what investors expect, unless they are investing in an FDIC insured bank account!)
Other things that come up are fears around rejection. Women seem to take rejection more personally and therefore feel more hurt when they get a no from a potential investor, causing them to be more hesitant to ask in the first place.
Women also tend to downplay their accomplishments and dwell on the things that can still be improved, so it can be hard for them to imagine why anyone would invest in their business.
Many women are used to doing things for themselves and are not accustomed to asking for support. They may feel that asking for investment is a sign of failure or weakness because it shows that they are unable to grow their business without any outside support.
Finally, and maybe most pernicious, many women have fears around growing their businesses. Women assume that growing their business will mean more stress, pressure, and hard work and they simply don’t want to make the sacrifices that would require. And a voice inside may say, “Who am I to do this?”
Here are some of the things the women we interviewed said:
- Number 1 is confidence, confidence, confidence. You have to be confident that you can take that person’s money and earn some money back.
- Probably confidence. Feeling confident that I wasn’t going to look dumb approaching someone.
- Women don’t take themselves seriously enough, nor does the business community.
- Culturally, female entrepreneurs are not trained to ask directly for what they want, and I think that’s a learned skill.
- Women internalize they’re not good at math or finance.
Knowledge of the Options
Not all of the beliefs that hold women back from raising money are “limiting” or negative. Sometimes, women are so committed to the values and mission of their business that they are unwilling to give up control to investors that will push them to grow their business at any cost. Unfortunately, many entrepreneurs are not aware that there are many ways to raise capital and that it is possible to choose a strategy that is in greater alignment with the woman’s goals and values.
Finally, there is a great deal of evidence that bias (both conscious and unconscious) continues to be rampant in the world of entrepreneurship. While this can manifest in multiple ways (anything from potential investors making inappropriate sexist comments to women entrepreneurs to investors assuming that women won’t be as committed to their businesses because of child rearing obligations), the most pervasive problem is investors’ unconscious belief about what an investable entrepreneur looks like. I don’t know any investor (including myself (Jenny)) who hasn’t been affected by this unconscious bias. I’ll admit that a tall, gray-haired, white man who confidently introduces himself as a serial entrepreneur may “feel” more investable to me than a woman who reveals that she has had both successes and failures and doesn’t come off quite as self-assured. What I have learned over the years is that these impressions are often very bad predictors of who actually will be the best steward of investors’ money.
Here are some of the things the women we interviewed said about biases they’ve encountered:
- I think there is a subconscious bias. There’s an expectation that women will take a break to have children, or maybe aren’t viewed as seriously. I think women are equally prepared and capable, and it’s a matter of getting into the room and having those introductions.
- I’m just speculating, but I would guess that there is an old-boys network that women are not really part of yet. That’s my suspicion.
- Men have more credibility. I was talking to another entrepreneur, he’s in the same boat I am. And when we spoke he got a $10,000 loan [which I didn’t get]. And so part of me thought part of it was because he’s a white man.
Further research is needed regarding female entrepreneurs raising capital. As long as women keep their businesses small and struggling, our economy is being deprived of an amazing source of innovation and wealth creation.
The National Women’s Business Council noted there is a strong need to promote a broader range of alternatives for capital access, as female entrepreneurs experience a pronounced disparity in attempting to raise angel and venture capital. And, as noted above, this approach may be wrong for the vast majority of women entrepreneurs (and entrepreneurs in general).
We call on the academic and research communities to devote some serious resources to the study of what stands in the way of women raising the money they need to grow their businesses to the ideal size and thereby make the contributions they are capable of making to our economy and future.
What to do if you need to raise money now!
Just knowing that you’re not alone – that many of the limiting beliefs that go through your head are so common can help you recognize that they are just thoughts and you don’t have to believe what they say!
Another important step is to get informed about all of the different potential sources of capital so you can find one that fits your unique goals and values.
Finally, don’t try to do it alone! Join a supportive community of like-minded women entrepreneurs and go through the process together.
To apply to talk to Jenny about your capital raising strategy, click here.
 Raina, Sahil. “Research: The Gender Gap in Startup Success Disappears When Women Fund Women.” Harvard Business Review. Harvard Business School, 19 July 2016. Web. 21 Apr. 2017.
 Entrepreneurial Ecosystems and Their Service of Women Entrepreneurs. The National Women’s Business Council, Apr. 2017.
I was recently interviewed by my friend Tania Vasallo, the founder of The Courage to be Happy Community.
Every month, she interviews an Inspiring Woman Of Courage and shares the interview with her community. This month she featured me! I’m sharing the interview with my own community here.
If you’d like to receive juicy tips, resources, and inspiring articles, sign up for Tania’s ezine at thecouragetobehappy.com and you can also get her FREE starter workbook at designingmylifeworkbook.com
Here is Tania’s post about me:
Today we are featuring my dear friend and colleague Jenny Kassan. Jenny coaches mission-driven entrepreneurs to raise capital on their own terms from investors that love them.
She has two decades of experience as an attorney and advisor for mission-driven enterprises. Jenny earned her J.D. from Yale Law School and a master’s degree in City and Regional Planning from the University of California at Berkeley. Not only is she brilliant but has the kindest most caring heart for all women that are running their businesses, she has your back!
Jenny is actually hosting her inspiring and successful Fund and Fuel Your Dreams Event on March 30th to April 1st. Early bird tickets will be expiring soon so if you are a mission driven women entrepreneur that is looking for ways to fund your business without sacrificing your soul or losing control, you won’t want to miss this event. I will be there and it would be wonderful to connect with you and learn from a master at her craft.
If you are interested please click on this link to get your tickets now
Jenny is a giver. I love her energy and how she inspires so many women with their businesses. You can read all about her thoughts and journey below. Remember to sign up for her event.
Meanwhile, have a great weekend!
1. Your definition of happiness:
Loving yourself unconditionally and having a supportive community.
2. Your definition of courage:
Doing things that are outside your comfort zone and knowing that no matter what happens, it is perfect.
3. Your definition of freedom:
Having the time, energy, and resources to say yes to the things that light you up and no to the things that don’t.
4. Your definition of success:
Having the time, energy, and resources to say yes to the things that light you up and no to the things that don’t.
5. What do you do for a living?
Coach mission-driven entrepreneurs to raise capital on their own terms from investors that love them.
6. What has been your biggest investment in yourself this year?
Hiring a very high quality professional marketing team.
7. Did you always know what your purpose was? If not, when and how did you discover your purpose?
No – it happened little by little through experimentation, lucky accidents, and listening to my gut.
8. What motivated you to design the life that you love?
I started my own business when I got kicked out of a business that I co-founded. I’m not sure I would have had the guts to do it if I hadn’t found myself with no other option.
9. What was your biggest obstacle along the way? How did you get over it?
My biggest obstacle was self-doubt. I didn’t get over it, but I have learned how to put the voice of self-doubt in its place. I say, “I know you are trying to keep me safe, but I’m not finding your input helpful at the moment!”
10. Was there any period in your life where you were stuck or didn’t know what to do? How did you handle it?
I was in a verbally abusive marriage and was being told every day that I was worthless.
Something deep inside me knew that it wasn’t true and that part of me finally rose up and said enough! That was the beginning of my finally believing that I have inherent value no matter what I do or say, how I look, or how much money I have.
11. How do you confront fear and connect to your courage?
I recognize that fear is just a voice trying to protect me and I don’t have to believe what it says.
12. Are there any days that you don’t feel motivated and if so, what do you do about it?
Yes – I try to listen to what my inner voice says about what she feels like doing in any particular moment. If she feels like sleeping late, getting a massage, or just sitting there doing nothing, I honor that. I know that later I will be in the mood to do other things like send out that proposal or write that blog post. I try to trust my feelings to guide me to the best thing I can be doing in this moment.
13. Do you think our world is starting to have more female driven energy in business or do we still have a long way to go?
I do! I see so many people getting tired of the more masculine model of doing business which I see as constantly pushing to get as much done as possible as fast as possible, no matter what the long term costs might be. I see feminine energy as more balanced, patient, and focused on creating long term value. I think both men and women are recognizing the need to have a balance of both masculine and feminine energy in business rather than being exclusively masculine as it has been for so long and has not brought us to a very healthy place in our culture or economy.
14. What would look different in our world if we could join forces with more women to co create together, and empower one another to be leaders and change makers?
More people would have more fulfillment, happiness, and balance because when women are empowered and working together, we can create a better world for everyone in which we value so much more than just accumulation of money and stuff.
15. What can a women leader like yourself teach other women or men (husbands, brothers, fathers, sons) so that they can tap into more of their feminine energy and power?
Don’t feel the pressure to conform to societal demands – try to find the thing that makes your heart sing – one of my favorite quotes is “Don’t ask yourself what the world needs. Ask yourself what makes you come alive and then go do that. Because what the world needs is people who have come alive.” – Howard Thurman
16. What do you want people to remember you for?
That the more you are truly yourself, the better off you and everyone around you will be.