From Facebook’s Sheryl Sandberg to General Motors’ Mary Barra, more and more women are earning top leadership positions.
It’s clear that women have come a long way since the Mad Men era. But, women still hold a mere 14.6 percent of executive officer positions. And this pattern continues with women entrepreneurs and small business owners, especially when it comes to raising capital. According to the “Kauffman Firm Survey,” men start firms with nearly twice the capital that women do. On top of that, only 4.4 percent of the total dollar value of all small-business loans goes to women.
So why does the funding gap still plague women entrepreneurs today? It could be that women are more risk averse. When starting my business, I always took more calculated risks than blind leaps of faith and funding seemed chancey. Asking for money is also a touchy subject that never feels comfortable. Women could also fear that committing to funding cycles will take time away from family.
Despite the hurdles widening the funding gap, every entrepreneur needs capital to sustain a business. As a woman entrepreneur, don’t let these start statistics deter you from actively seeking funding.
Here are five tips for getting the funding you need to succeed:
1. Broaden your funding horizons.
Raising capital doesn’t always have to be in the form of venture capital or equity financing. There are many wonderful options out there, including bank loans, crowdfunding, lines of credit and Small Business Administration loans. Educate yourself on the variety of available funding sources to find out which one suits your needs best.
2. Network with others.
Entrepreneurs who build a strong network have a greater amount of resources and insight into funding opportunities. There are many women networking organizations, such as Ellevate, that support business growth, provide financial advice and offer mentorship opportunities. Make a concerted effort to connect with powerful businesswomen, and if you’re in a position to mentor somebody else, step up and do it.
3. Get involved.
You can (and should) be an advocate for the change you want to see in the business landscape. As you search for funding opportunities, support other women and any initiatives that advocate women in business.
For example, Sen. Maria Cantwell and the Committee on Small Business and Entrepreneurship recently introduced the Women’s Small Business Ownership Act of 2014. This legislation deserves a round of applause for increasing access to lending as well as business counseling and training for businesswomen.
4. Seek corporate and government support.
Don’t let large corporations intimidate you. Big-name players, such asAmerican Express, are now creating support programs for women entrepreneurs by providing useful content, forums and even boot camps. The government also sets aside contracts and funds for minority-owned, veteran-owned and women-owned businesses. There are countless opportunities: You just need to take the plunge.
5. Don’t hold yourself back.
Sheryl Sandberg, chief operating officer of Facebook, is famous for promoting self-confidence in women. According to Sandberg, women leaders often get in their own way by underestimating their abilities and goals. Being cautious can pay off in some areas of business, but when it comes to raising capital, you need to approach funding sources with a winning attitude.
Accessing capital is paramount for any growing company. By facing the funding gap head-on and taking advantage of the resources and mentors available, you can overcome this hurdle and secure the funding your business deserves.