The number of women entrepreneurs who have succeeded in raising venture capital is shocking, with less than 3% of VC funding going to female-led startups. That’s a startling statistic for many reasons, not least because it means that women entrepreneurs are being denied access to the same resources as their male counterparts. Last year’s trend didn’t lend cause for much optimism either, dropping from an all-time high of 2.8% in 2019 to 2.3% in 2020.
Yes, we’re serious… women-led start-ups get less than 3% of the VC funding.
With more and more female founders starting businesses every day, there is no shortage of potential success stories waiting to be told. So, where’s the disconnect? Why has the VC-sphere been such a boy’s club? There are a few reasons but the biggest? VC teams tend to invest in companies that remind them of successful start-ups or remind them of themselves. Since men have typically built venture capital partnerships, and men dominate the VC network, it’s no surprise that all-male teams took 87% of the funding last year, and mixed-gender teams took second with about 9%.
The antidote to the VC funding gap: Resilient Confidence
Do some soul-searching: take time to reflect on your (and your business’s) strengths and skills. Be honest with yourself: are you pound-the-table confident in yourself and your business? If the answer isn’t a firm and unflinching HELL YES, you’ve got a lot of work to do.
A winning mindset and resilient confidence are critical when raising capital, especially among women, who are more likely to be told “No” when looking for financing because they don’t fit the “boy’s-club” mold. When you hear “No,” it’s not the end of the world; instead, use that feedback and try again!
So how do you build resilient confidence? Let’s explore the importance of having a solid capital raise mindset and some critical tips for women looking for financing. Start here:
Identify your emotional baggage and get rid of it with fear-setting.
We know you’re wondering why we’re not talking about goal setting, so let’s talk about it. There’s no room for you to dwell on past mistakes or what keeps you up at night. When you’re walking in to pitch your business, you need to leave all that junk behind. One exciting approach to this is to have a “fear-setting” session. Developed by Tim Ferris, this is an intentional process of identifying anything getting in the way of a full-speed approach to your goals.
Why do a fear-setting session? We are hard-wired with a protective mechanism to avoid the unknown. Pitching an investor or even going full force with a new business have a ton of them. By intentionally looking at the most dangerous or most likely outcomes, we get a more straightforward handle of what was previously unknown and gain more mental control over how we’ll respond if those outcomes do happen.
It starts with ONE: Develop yourself.
Especially when starting, think of yourself as the most significant asset and the highest priority for investment in your business. Create a budget for both time and money to enhance your skills and capabilities.
So, how do you go about it? Here are some places to start:
- Read (and listen) to more books. Reading doesn’t just bestow us with the knowledge and stories in the content. It helps us become better storytellers and makes it easier for words to come to us. It makes us more articulate and improves our knowledge of the subject.
- Work on your soft skills. Soft skills are the harder-to-measure character traits and personal attributes that help you navigate business and life. Listening, communication, teamwork, and delegation are all examples. Know you can listen, but need help with time management? Create a plan to address it.
- Find a mentor. Think of a mentor as your self-development sherpa. Don’t think the relationship is entirely one-way either. Mentors gain a lot from working together with their mentees, and you’ll be asked to mentor someone else someday. They can point you to the right resources and provide feedback on your blind spots so you can address them.
- Take a course. It seems obvious, but there are specific courses available to fit your individual needs. They come in different formats with different scopes of coverage, so if you’re reluctant to commit your time to a long or time-intensive course, start small with something self-paced and of limited scope.
Don’t wait for perfection.
You’ve probably heard it before: perfection is the enemy of done. Don’t delay investment opportunities because you’re waiting on the perfect format or words to come to you. The answer to an unasked question will always be no.
The truth is, you’ll never be done improving and evolving yourself, your business, or how you communicate either with the outside world (be them customers or investors). Waiting for perfection leads to stress and discontent; it leads to risk aversion, stifles creativity, and ultimately burnout.
The ultimate resilience: falling in love with “No.”
Tom Watson of IBM and Steve Jobs both echoed the same sentiment: failure, and the willingness to accept it, are crucial to success. Just as waiting for perfection, fear or avoidance of failure is a stagnation quicksand trap. Come-what-may, get ready to put yourself out there and embrace what comes next.
- “No” means you’re pushing yourself. If you haven’t heard it yet, it means you haven’t tested the boundaries of what you can potentially get.
- “No” is an opportunity to get feedback and improve. No doesn’t have to be the end of the conversation. If they’re not forthcoming, it should prompt your curiosity and further clarification.
- A good “no” is better than the wrong “yes.” Sometimes a no is a blessing. It’s important to realize that the “no” could have nothing to do with anything on your end, and the ultimate goal is the right yes a the right time.
We know that the VC funding gap is a big problem for women-led start-ups, and we want to help. If you’re a female entrepreneur who has been struggling to secure the funding and resources necessary to launch or scale your business, it may be time for some self-reflection and esteem building to get back on track. If you’re feeling stuck, don’t worry–we can get you unstuck with phase 1 of our Capital Raise Bootcamp. Learn more here!