Sensitive. Timid. Collaborative.
Words like these (somewhat stereotypically) have been associated with women for years. There might be some truth in them, though — at least when it comes to business.
While women are more likely to start service businesses, they’re less likely to pursue anything — whether it’s a job, funding, or a personal interest — unless they’re 100 percent confident in their abilities.
All this begs the questions: Are women less likely to pitch ideas to investors, or more likely to give up? Is a woman’s affinity for certain industries, and low risk tolerance due to some predisposition? Or is it the result of a lack of resources available to her to get her off the ground in the first place?
The answer may not be black and white, but by understanding the nature of women entrepreneurs and how they fit into the startup scene, women can be more strategic in their funding and more successful in their startups.
Underfunded, Not Defeated
Women entrepreneurs receive only 19 percent of angel funding and about 6 percent of venture capital, making it much more difficult for them to launch scalable, successful companies. And with a large gender gap in the tech industry, women are often vastly outnumbered.
The trouble is that many venture capitalists use this as a common justification for the lack of female-led venture funding, when — in reality — the issue is much more complex.
For instance, one recent study conducted by the Proceedings of the National Academy of Sciences indicated that pitches narrated by male voices were picked more than twice as often as those narrated by their female counterparts.
While this finding is a bit disheartening, women can capitalize on their strengths by identifying the right approach to funding. In many cases, the answer could be crowdfunding and investing, which can lead to more success for female entrepreneurs.
Here’s why (and how) your female attitude goes a long way toward raising funds and awareness for your startup:
Leverage Your Support Network
Crowdfunding is all about community, making women more likely to both launch and support crowdsourced businesses. Add in women’s natural inclination to rally around and support one another, and it makes sense that they’re a lot more successful when crowdfunding, rather than raising capital through traditional means.
Get Support for Your Small-Scale Ventures
Often, women focus on smaller, service-based ventures, which discourages investors because there’s no apparent ROI. Crowdfunding, on the other hand, allows women to leverage the power of the crowd, since it offers more of a personal connection with the business owner.
Women are able to share their own stories with others and illustrate what makes their businesses appealing. Since people pledge smaller amounts, the actual business plan isn’t as important, and there’s room for other information in the pitch.
Grab Your Megaphone
According to the Pew Research Center, women have become the power users of social media, with 74 percent of them actively using it. This makes crowdsourcing a natural option.
So, where should women start? There’s a world of opportunity when it comes to potential new ventures, as well as an equally large number of options for crowdfunding platforms. Here are a few of the newest and most popular in the crowdfunding space, particularly for women:
- CrowdHelps: This global crowdfunding platform is geared specifically toward women. It’s built on the premise that everyone can help change women’s lives by donating funds and offering professional advice, free time, or kind words.
- Plum Alley: Plum Alley spotlights women’s innovation, whether in products, projects, or ventures. Additionally, the platform houses a shop where women can sell their crowdfunded products. VROU, a multivitamin drink for women, raised funds through this platform.
- Fund Dreamer: Fund Dreamer is dedicated to helping women and diversity groups fund their dreams — whether that’s in the form of a business idea, a personal cause, or an event.
- Kickstarter: A longtime favorite of the global crowdfunding community, Kickstarter is a popular and robust platform, based in the U.S. Julie Sygiel, founder of Dear Kate Yoga Pants, raised more than 1,000 percent of her goal on Kickstarter.
- Indiegogo: Indiegogo was one of the first sites to offer crowdfunding. The global platform is based in San Francisco, and it has hosted many successful female-led ventures, including Lauren Pears’ (i.e., “Chief Crazy Cat Lady”) Cat Café in London.
Women may be more likely to empathize and overanalyze than men, but this actually makes them better leaders. They build better teams, are more liked and respected as managers, tend to more seamlessly combine intuitive and logical thinking, are more aware of the implications of their actions, and can more accurately discern which resources are needed to accomplish outcomes.
By embracing these positive attributes, women can be not only strong leaders, but also successful startup owners.
Image credit: CC by Pedro Ribeiro Simões