How to Attract Investors’ Interest as a Female Founder

First, some good news. The number of female-founded startups is growing, from only 4% in 2001 to 21,6% in 2018 according to the US Securities and Exchange Commission. While this is definitely a positive trend, I look forward to the day when this number is closer to 50%. Also, too few of these women choose to raise funding. 

Therefore, what women can do to effectively seek finance is - for the risk of sounding obvious - to actually make a decision to go out and raise. On a global level, only 2% of risk-capital could be attracted by female teams according to Female Founders Monitor 2018. This is a shocking statistic.

To improve your chances of success as a woman looking to raise funding, focus on your key strengths. Generalising, women tend to be strong in people-skills, building co-operations, networking. So, build upon your strengths! They can and will work very well to your advantage when pitching for finance.

Secondly, identify your female-led startup role models who can help provide introductions to investors. Also, pitch to a diverse group of investors. As per statistics 29.5% of angel investors in the US - and 11% of VCs - are women. Seek them out and rather than asking for investment upfront, ask for advice and build strong and lasting relationships.

When in front of investors, be aware of favourable statistics which state that every $1 invested in male teams produces 31c of revenue whereas the same invested in female teams equals 78c. On top of this, use real data to help support your idea. Feedback from potential - or existing - customers tend to work best. Also, don’t forget to define the market opportunity and market size.

Be bold and clear with investors when it comes to your ask. In general, women tend to ask for less money as compared to male founders. Demonstrate your expertise and confidence in your venture. Break down how the investment will be used and explain how it will help you get to the next level.

Lastly, be enthusiastic about your long term vision and the way you want to influence - or transform - your industry. It’s the bigger picture, plus clarity about the exit plan - that will help get investors on your side. Research shows that while male-led startups tend to focus on growth, female-led startups on average are more orientated towards early earnings. Have the courage to act against the norm and define a new standard.

Summing up, while the odds are currently stacked against women when it comes to fundraising, it’s possible to use the fact that you will stand out as a female founder to your advantage. Also, it’s promising that the number of female investors, role models and success stories is increasing, such as the recent IPO of the dating app Bumble. With time, as the number of funds focused on underrepresented founders grows, it’s bound to become easier for female-led and mixed startups to raise finance.