It is a fact, women rarely get funding when they want to raise capital to scale-up their business.
What is going on?
There is an important thing you need to know first:
Women are risk-avoiding. So the idea of scaling up faster with external capital is an idea that is not very attractive to most businesswomen. And to be honest, I was the same.
How did I start?
I started my first business at the age of 25, back in 1990. I was 2 years on my way and got a big contract which allowed me to scale up massively. I went to a bank to finance this growth.It was an experience that changed my beliefs about banks dramatically. I met the bank manager but the impression that this man gave me was the opposite of confidence :
• You are too young.
• Why do you, a woman, have a business. (Back then this was less common than nowadays).
• You don’t come across seriously.
• You are doing business internationally where is our money going?
I was very disappointed and I committed to one thing immediately:
“I will show you!”And I did because the new client was willing to pay some in advance so that I could invest in new equipment. Ever since, my business grew immensely until I sold it 22 years later.
Only one more time I went back to a bank. I wanted to buy the office I was renting. My husband had to sign, for the mortgage too. I was shocked, he had nothing to do with my business. He did not feel comfortable signing.
I always made sure to grow my business with the money that was earned. It went slowly but in control. Is this smart? I doubt it because I could have made a lot more momentum. But I felt safe and did not want to take large risks. And this is one of the biggest issues with businesswomen. Most of them do it exactly the same way I did!
And therefore they are very serious businesses to invest in. Did you know that, when investing in a women-owned business every euro you put into it as external capital, you will get 2 euro’s back? It is the safest investment for investors to invest in women-owned businesses. Why don’t they?
What are the issues, with women raising capital?
• They have less access to capital because often they do not belong to the old boy’s networks of men with capital. The investors and the businesswomen simply never meet.
• Woman don’t position themselves well in front of an investor. Their presentation is on the safe side. They often don’t know their numbers well enough.
• They are afraid to share stocks of their business and therefore give away their decision position
• The investors, often male, feel more attracted to the big plans and great scaling possibilities of male business owners. They understand this language and they interpret the pitch of a woman, which is on the safe side, as not exciting enough and with not enough potential.
That last one is not true of course, because a woman only asks for money if she is nearly 100% sure that she can pay it back.
To help businesswoman have different opinions about finding investors I took the women of my business network “Powerful Business Women’s Network” to an investor.
What did we learn?
• You have only 3 minutes time to pitch
• If you need less than 1 1/2 million you will usually find an angel investor. A former entrepreneur who gives you money and helps you in your business. They like to share their knowledge.
• The most important mistake start-ups make is that they give away too many shares in the first round.
• You need to be prepared to spend 60% of your time in finding investors because that is the amount of time it takes.
• Your mission and vision are essential and is often forgotten in a pitch
• An investor does not want to lose his money but even more important he does not want to lose his reputation.
• You need a minimum of 3 persons in your team. A CEO, a CFO and an online technician
• You need to include market research in your pitch
• When you have the IP (intellectual property) or the patent to your product, that is an important pro.
Big mistakes many pitchers make:
• Value their business too high
• They ask too much money the first time
• They don’t have their numbers in order.
I can tell you we learned a lot.
Our host was Jeroen van der Heijden from Impact Tribe. They help scale-ups to prepare and introduce them to their network of 300 investors.
If you are interested in our network for serious businesswomen please have a look at
Come along to meet The Powerful Business Women’s Network
in Switzerland and The Netherlands in April 2019
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