Funding Your Startup – Advice From Female Entrepreneurs to Female Entrepreneurs
Being an entrepreneur is hard, but being a female entrepreneur is even harder. Not only do you have to go through the trials and tribulations of learning to run a company, you have to do so while facing discrimination and institutional barriers along the way.
The good news is you don’t need to do it alone. The best way to learn is by taking advice from those who made mistakes before you, which is why mosaicHUB and Foley Hoag, LLP kicked off their Women in Entrepreneurship Series this past week. The panel of female Boston entrepreneurs included: Mary-Alice Miller, founder and CEO of mosaicHUB, Sarah Biller, president of investment at Capital Markets Exchange, and Dr. Catherine Havasi, CEO and co-founder of Luminoso.
Here are the top 5 pieces of advice these female entrepreneurs learned the hard way so you don’t have to:
1. Be Creative with Funding
While startups tend to focus on venture capital, the reality is very few startups secure venture financing. This is especially true for female entrepreneurs, with recent studies revealing that only 4% to 7% of venture capital funding is going to female-led startups.
Despite these depressing statistics, the panelists urged female entrepreneurs to be persistent. These women started their companies creatively with friends & family rounds, strategic partnerships, bootstrapping, consulting revenue and grants. The reality is that startups often have to be innovative when initially finding ways to fund their businesses, but for those with passion and determination, there are options.
2. Find the Right Investors
An investor is more than just a source of money and should be treated as such. When choosing to bring on investors, entrepreneurs should be thoughtful.
“Good investors bring connections,” explained Catherine Havasi. “Think what your business needs and what they can add. It’s not just capital, it’s ‘smart capital.’” All three panelists highly recommend getting a warm introduction to investors and doing extensive research on who would make the ideal investor for your particular investor.
3. Selling to Build a Team
Building a team can be challenging for any company, but is particularly difficult for startups with limited funds. The solution? Founders need to embrace selling the job. Mary-Alice explains, “While you might not be able to offer a big salary, you can offer incredible experience and an opportunity to tackle big problems, which one doesn’t get early on in a large corporate job.” Another solution is getting creative when recruiting. “I notoriously showed up at Venture Café with a top hat that said ‘I’m hiring’,” said Catherine. Even if you aren’t ready to pull a top hat out, making your company as noticeable and appealing as possible will ultimately help attract the correct talent.
4. Plan Before Transitioning to Entrepreneurship
Transitioning into entrepreneurship takes guts and a lot of planning. There are a lot of steps that you can take before making the leap, including attending startup events, talking to other entrepreneurs, and finding mentors. “Do not think for a minute it’s glamorous. The successful entrepreneurs are workers. They are getting their hands dirty with the problem every day,” warns Sarah Biller. Knowing the realities of entrepreneurship and surrounding yourself with smart, supportive people are critical steps to success.
5. Do a Passion Check
So when do you know it’s time to take that leap? “The turning point for me was finding a problem I couldn’t let go of,” explains Sarah Biller. “The risk of sitting at my desk at Fidelity was larger than the risk to leave for my new project.” There is a different tipping point for everyone, but making sure you’ve found the passion to fuel the roller coaster ride is an important first step.
Did you find this advice helpful? Are you craving more? Come to the next panel at District Hall, Seaport District on April 8th, 2014 at 6pm. You will get the chance to network with other female entrepreneurs and hear from the area’s top female investors.