I started helping mission-driven entrepreneurs raise capital almost ten years ago. My clients have collectively raised almost $20 million, with amounts ranging from $150,000 to $4 million.
About two years ago, I was compiling a list of the clients that I had helped to raise money. At that time, I could honestly say that every client that I had worked through the whole process with (i.e. if I excluded those that changed their minds and didn’t complete the process) had met their fundraising goals. Some took longer than others, but all of them had eventually reached their goals.
Looking at the list, I noticed something strange: almost all of my clients were companies led by men.
I decided I wanted to start focusing on helping women entrepreneurs raise capital. So that is what I have been doing for the last two years. And here is the dirty little secret that I don’t like to talk about: I am not seeing the same success rate that I saw with my male clients.
Yes, some of my female clients are raising money, but I am seeing them take longer and struggle more than my male clients.
What is going on? I have done some research, as well as paid attention to what women entrepreneurs say about raising money. I’ve also reflected on my own experience raising money from investors three times in the last five years. Here are a few data points that are consistent with my observations:
- Men in the United States are about 25% more confident than women in their capability to start a business.
- Men apply for a job when they meet only 60% of the qualifications, but women apply only if they meet 100% of them.
- Women are 70% more likely to say “I didn’t want to put myself out there if I was likely to fail.”
- Investors prefer pitches presented by male entrepreneurs compared with pitches made by female entrepreneurs, even when the content of the pitch is the same.
Based on my own experience and talking to hundreds of women entrepreneurs, I think all of these phenomena contribute to the problem. Women entrepreneurs have less confidence about asking for money, feel they have to have a perfect business before they can ask, and would rather not ask if they think they will get a no. To make matters worse, when they do ask, the deck is stacked against them because of gender bias.
Another problem is that the fundraising strategy that gets the most hype is the Silicon Valley model which requires super-fast growth at all costs, which just doesn’t fit what many women entrepreneurs want for their businesses and their lives. They often don’t know that there are many ways to raise capital.
I am really tired of seeing women having to work harder to raise money!
So I am partnering with Amrita Sankar of ImpactAssets to do more in-depth research about what factors contribute to the funding gap that women face and what kinds of interventions are the most effective for helping women achieve their fundraising goals in a way that allows them to stay in alignment with their values.
Please stay tuned over the next few months to hear more about our findings.
 Global Entrepreneurship Monitor 2015 U.S. Report, Babson College
 Hewlett Packard report.
 “Why Women Don’t Apply for Jobs Unless They’re 100% Qualified” by Tara Mohr, Harvard Business Review, Aug. 25, 2014
 “Investors prefer entrepreneurial ventures pitched by attractive men” by Brooks et al., PNAS, March 25, 2014; available at http://www.pnas.org/content/111/12/4427.full.pdf
Here is an exercise we recommend in order to make sure you get your fundraising done within a reasonable amount of time.
1. Imagine you have reached your fundraising goal. You are looking at the list of all your investors and how much each one invested. What is the lowest amount that someone invested and what is the highest amount? Try to create a clear picture in your mind of your investor list and the amounts invested.
2. In your imagination, scan the list and estimate what the average investment size per investor is. For example, you may picture that you’ll have some people come in at $5,000, some at $10,000, a few at $25,000, maybe one or two at $50,000, and one at $100,000. In that case, you may estimate the average per investor to be $20,000. You can use this tool to decide how much you’ll ask for from each potential investor: http://www.jennykassan.com/blog/7-steps-for-making-the-big-ask/
3. Now, take the total amount you want to raise and divide it by the average per investor. That will tell you the approximate number of investors you’ll have when you reach your goal. So, if you want to raise $400,000, you’ll end up with around 20 investors.
4. Multiply that number by 10. That is the approximate number of potential investors you’ll need to talk to about your offering. (This assumes that an average of one out of ten people you talk to will say yes—you may do much better than that, but it’s best to be conservative). In our example, this would be 200.
5. Divide that number by the number of weeks you would like to devote to reaching your funding goal. This is the number of people you will contact per week about investing. So, if you’d like to reach your goal within six months, divide 200 by 26 weeks—you need to contact 7-8 people per week.
6. Assume that for each contact you’ll need to spend 30-60 minutes on average. Multiply the number of people you’ll talk to per week by the average number of minutes you think each contact will take. That is the total number of hours you should schedule into your calendar for contacting potential investors. Add at least half that many hours to give yourself time to follow up with people who haven’t yet given you a definitive answer. In the example above, I would assume eight hours per week plus another four for follow up—so a total of 12 hours per week should be spent contacting potential investors.
7. Now block out that time in your calendar for the number of weeks you gave yourself to reach your goal.
If you use this method, you’ll keep your momentum going and get that fundraising done before you know it!
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