This week’s post will explore startup funding for women entrepreneurs, helping to separate fact from fiction. In the business world today, the number of women entrepreneurs is growing rapidly with more and more female-founded entrepreneurial ventures being established on a daily basis. In fact, as of 2016 there were more than 9 million women entrepreneurs in the United States. Since 2001 the growth rate of women-owned firms has been 1.5 times higher than other small businesses. Overall, firms led by women account for about 5 million U.S. jobs.
Some of the most well-known women-owned businesses include widely recognized names such as Parachute Bedding and Bath, Laurel & Wolf Interior Design, Away Luggage and Rockets of Awesome clothing for kids. Each of these businesses is an exceptional example of a thriving startup venture founded by women. With these ventures proving extremely lucrative, now is the time for female entrepreneurs to begin starting up their dream businesses. The only question is where to find grants for women entrepreneurs?
Different Types of Startup Funding for Women Entrepreneurs
Regardless of gender, typical sources of startup funding include:
- Self-funded (savings, retirement accounts, etc.).
- Friends and family.
- Banks and other financial institutions (loans, convertible notes).
- Equity Investors (venture capital, angel investors, private equity investors, etc.).
But for many women entrepreneurs, these typical sources of funding are out of reach. For example, on average, only about 2% of all venture capital deals are awarded to female entrepreneurs each year. Women also find challenges in securing funding through banks, angel investors and other sources of startup capital. In fact, in a survey of 1,500 women entrepreneurs, 70% of respondents said obtaining capital is a major challenge when launching a business, and 69% say it is also a challenge when growing a business.
Grants as a Source of Startup Funding for Women Entrepreneurs
To help bridge the startup funding gap between men and women, a number of entities offer grants to help women entrepreneurs launch and grow their businesses. Grants are the type of funding that does not need to be re-paid. Even better, grants provide non-diluting funding, allowing the recipient to access capital, without giving up equity or taking on debt. It is the best type of financial aid that you can possibly receive as it gives you the freedom to grow your business however you please without pressure of paying back a sum of money with interest. The biggest drawback with grants is they are extremely hard to come by and the competition for grants is intense to say the least.
Where to Find Startup Funding for Women Entrepreneurs
Here are a number of places you can look to find potential sources of startup funding for women entrepreneurs. This list provides resources for uncovering more traditional sources of funding such as loans, as well as grants for women entrepreneurs, technical assistance and even a crowdfunding program solely dedicated to helping women entrepreneurs launch their startups.
- Women’s Business Center: The Women’s Business Center is affiliated with the U.S. Small Business Administration (SBA). This program sponsors up to 100 women-founded business startups nationwide. The Women’s Business Center is a great source of finding startup funding for women entrepreneurs as it covers a broad range of funding sources.
- Small Business Development Centers (SBDC): Like Women’s Business Centers, SBDCs are also affiliated with the SBA. These agencies are located all over the country and work with you to develop your startup idea and to find local investors who are willing to provide grant funding in your nearest location.
- GrantsForWomen: The website GrantsForWomen.org provides a comprehensive listing of legitimate grants and scholarships available to women in the United States. The lists are regularly updated and cover a broad range of topics, not just startup funding.
- InnovateHER Annual Challenge: The SBA annually hosts a startup business competition for women. This challenge is known as the InnovateHER Challenge offers women entrepreneurs the opportunity to win up to three awards and a total of $70,000 in prizes. The only drawback is this challenge is extremely competitive but the rewards are amazing.
- Eileen Fisher Women-Owned Business Grant: This business grant is very similar to the InnovateHER annual challenge as it is another competition for grant funding. The only difference is this competition requires women to have current businesses already running for a minimum of 3 years. If you fall under this category, you have the opportunity of earning $100,000 for your business venture.
- 37 Angels Grant: 37 Angels offer as much as $150,000 to women-owned companies should they be chosen for the grant. They recognize the inequality given to women entrepreneurs in starting a company, especially with regards to loans. As the business grows, 37 Angels can also be a great source of investment capital.
- Belle Capital Grants: Belle Capital offers several business grants for women, depending on the purpose of your company. The group can also be a source for later-stage investment capital too.
- Huggies Mom Inspired Grants: There are grants that are specifically for moms. Huggies offers twelve Mom Inspired Grants worth $15,000 each annually for women who innovate ideas inspired by the learnings of being a mother.
- WENYC: WE NYC (Women Entrepreneurs NYC) is an initiative based out of the New York City Department of Small Business Services that is dedicated to helping women start and grow their businesses. This is a crowdfunding program that provides the first 10 percent of loans for women entrepreneurs to help get their businesses off the ground.
While above is certainly not comprehensive, it does serve as a good starting point for uncovering potential sources of startup funding for women entrepreneurs. As more people realize the incredible economic and social contributions of female-led startups and businesses, we can hope to see more of these programs and opportunities in the near future. Interested in learning about business grants? Contact me today and let’s talk.