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Culture October 11, 2016
Business funding expert Victoria SilchenkoFemale entrepreneurship is on the rise with more than one in three businesses worldwide now owned by women.
If that statistic from the International Finance Corporation fires your desire to build a high growth company, then you’re going to first need investors to get your business idea off the ground.
Finding such people isn’t the hard bit but getting them to part with their money requires careful thought and a viable proposal, according to Global Alternative Funding Forum founder Victoria Silchenko Ph.D., who connects entrepreneurs with investors.
“Gender does not matter in modern business – competence does,” she says. “You must have a very clear idea about the customer who will pay for your product or service. Remember, ‘likes’ on your company Facebook page do not bring you money, people do.
“Investors are looking for a monetary return for their outlay and ventures based on innovation are the most desirable to them. The biggest successes tend to be those that create a whole new market or industry, such as Airbnb or Uber.”
Here are five ways to attract funding for your own innovative business idea.
Sites like Kickstarter and Indigogo allow you to raise funds online from friends, family and fans of your idea in exchange for non-monetary perks. But work on your social media profile before launching. Victoria says, “As an economist I look for formulas and the math is that $70 is the average donation on Kickstarter and around 10 percent of your following will back you. So if you have 2,000 followers you might count on raising $14,000. If you’re looking for more than that, get more followers.”
If you feel comfortable about giving up a portion of your equity in return for capital then you might approach “angel investors,” many of whom are registered at AngelList, but you can also pitch them your idea with numerous angel groups and events in major cities everywhere. “Today one in every four angel investors is a woman,” points out Victoria. “That’s a growth of 320 percent in the last 10 years.”
Grants, which are basically free money that you can claim for your business, are given out by private organizations, businesses and governments. If you are in the States, check out Grants.gov which includes a database of federally sponsored grants for small businesses. Victoria says, “If you search for them, there are many grants awarded to business that have a positive effect on women’s lives.”
“As a startup and pre-revenue company, it is highly unlikely you will inspire traditional bankers but the good news is technology has brought us what’s called peer-to-peer lending platforms where you can borrow money directly from your peers, typically tech savvy millennials, ” says Victoria. Check out platforms like Lending Club and Prosper to locate such P2P lenders. America’s Small Business Administration gives out loans up to $50,000.
Attending business events that bring together entrepreneurs and investors, such as the upcoming 5th annual Global Alternative Funding Forum in Los Angeles on Nov. 11 (metropoleglobal.com), is a great opportunity to mingle with funding sources, pitch your idea and strike a deal. Victoria advises, “If your business idea resolves a problem that has not been resolved yet, there will likely be a market for it.”
