I saw research that shows that female start-ups in the US raise less money than male ones. Does this gender gap exist in Australia, in your experience?
If so, as a woman, what can I do to improve my chances of getting funding from investors for my venture?
Congratulations on your business venture. We need more female entrepreneurs in Australia so I am thrilled to see that you are working towards the goal of having your own business.
My experience is that women are generally more risk averse than men and this is probably a reason why they raise less money.
They are conservative in their approach and often undersell themselves too. One of the common ways of women downplaying their success, for example, is when you read an interview from a female about what she has achieved she talks a lot about “we” and “the team” whereas men say “I” and “I did”.
Check it out for yourself. And take heed for your own future success, be proud of what leadership you have provided and take ownership of this. Your reputation and profile will become one of your most important assets in business.
In terms of raising funds, the key is to be clear about what you need, plan for things to go wrong and ask for more than you need.
It is always easier to over-achieve than to go back asking for more funds when you realise things are not going according to plan.
Also remember around 80% of small businesses fail in the first three years, not because they were not a good business or trading profitability, but because they run out of cash. Cash is king!
In terms of negotiation, don’t feel disadvantaged because you are a female. Seek out some basic rules of negotiation (the old WIFM i.e. what is in it for me?).
Anyone lending money or investing in your business wants to know what is in it for them – be clear about benefits, pay back dates and investment returns.
Benchmark if you can against other similar companies in the industry – it’s amazing what you can find via Google.
Also, remember that anyone investing in a business is investing in the person not the business. So if possible provide good examples of your expertise and references to demonstrate why the investor should trust you.
Professional investors will confirm this – they invest in people. So focus on you. Demonstrate how you know your stuff.