Glenda, the Good Witch in The Wizard of Oz, said, “You’ve always had the power, my dear. You just had to learn it for yourself.”
You and Dorothy have something in common. You have a power you might not even know you have. And we will tell you how to make money online as a woman by harnessing that energy.
Winning over investors to help fund your business idea can be challenging. Unfortunately, being a woman makes it even more difficult. Most decision-makers at many venture capital (VC) firms are men. Despite the gains in gender equality, the scale still tends to tip in favor of men in business financing.
Read on for empowering information to help you score the funding you need to make your side business blossom and grow. Here’s what you need to know to attract investors:
Women Rock at Business
Men receive more funding and more significant amounts of it than women when pitching their business ideas to investors. However, there are many studies on the differences between startups founded by women and men.
Investors everywhere would be wise to catch on quickly before losing out on serious opportunities. Consider the following data-backed benefits to women-owned businesses:
- Female-founded businesses earned investors two times more returns than male-founded ones– an average of 78 cents back for women-owned companies versus 31 cents for male-owned businesses.
- Women-led businesses tend to perform better over time– a nearly 3% higher return on equity (ROE), with ROEs around 226% at Fortune 1000 companies with female CEOs.
- Having at least one female founder in investment startups translated to outperforming all-male teams by 63%.
- Estimates show women-led companies grow by 84%, while male-run companies grow by 78%, on average.
- Women entrepreneurs are more efficient with capital. They bring in 20% more revenue than men, using half the money.
- A multinational study found that many women business owners in established economies pursue business opportunities that satisfy social needs, while men tend to focus on traditional business outcomes, like growth or profit.
- Women identify unmet demands, finding substantial opportunities in untapped markets.
Why It’s So Dang Hard Sometimes
Several biological and sociological factors work against us in business and gaining funding.
First, the majority of businesses are started and run by men. The same is true for VC firms.
Second, there’s a biological bias in which human beings tend to prefer people who look more like them. Perhaps that’s due to feeling safer with what we know. So, male VCs tend to award funding to men rather than women.
Third, men tend to oversell themselves and their ideas when requesting funding. Plus, they verbalize disagreement and argue their points more than women. However, when pitching to a group of men, the argument isn’t seen as aggressive (but it is for women).
Also, women and men have different world views. Females typically develop a product or service that aids other females or the environment. Male investors shy away from the ideas because they are unfamiliar territory.
Furthermore, men and women typically think and approach business differently. Studies show that most women develop a business satisfying an unmet social need. Men, on the other hand, create a business in a current market that directly competes with other companies.
Additionally, male VCs tend to ask questions of women during a pitch that they don’t ask males. Male VCs tend to assume females don’t fully understand the technical side of the business they start and won’t do well in business.
Combine any of the above factors, and you have an investor meeting bound to have biases and misunderstandings.
What’s a Girl to Do?
Knowledge is power! Now that you know your worth, own it. Remember our quote from The Wizard of Oz at the beginning of this blog? Ladies, we’ve always had the power and rocked whatever we put our minds to. Now that we have data as proof, let’s put that power into action.
Reread the bullet-point statistics above to empower yourself. Feel free to add those facts to your presentations to educate your audience at an investor meeting.
Next, prepare. Seek business coaches for female entrepreneurs, mentors, and sponsors who can help you practice and fine-tune your pitch (bonus points if these people have VC experience!) Keep networking until you’ve found the right people.
Really highlight the positive aspects of your product or service. Be ready to defend against the biased idea that you don’t know what you’re doing or couldn’t perform as well as a man.
Don’t undersell yourself or your brilliant ideas. Prepare hard facts about your business– information that shows its growth or potential. Boldly request the bigger investment you deserve.
Seek out VC firms led by women or with a reputation for investing in women-created startups. Once again, keep networking until you’ve found the right people or information.
Just as Dorothy had been standing in her power without knowing it, so have you. Women make strong business leaders, and we’ve given you a few stats, complete with links as proof. Feel free to do your own research. It won’t take long to gather the information you need to show yourself and any investor why investing in you is the right choice.