A recent study shows that female entrepreneurs are far less likely than their male counterparts to seek angel financing even though the percentage of women owned businesses actually getting funded is not significantly lower than businesses owned by men. In essence, women are not finding angels because they’re not seeking them. So what gives?
One of the authors of the study suggests that perhaps women don’t go to angels because there are so few women angels (a topic that deserves its own discussion!) and we prefer to work with like-minded people. In some ways, I can see his point. Through my past 2+ years of experience helping women to become entrepreneurs through ACTiVATE, I have seen that in general, women do prefer to work with people they are comfortable with. Getting to know a potential business partner on a personal level seems more important to women than to men.
I have other theories that I have developed over the years of working with (and being!) a women entrepreneur as to why women aren’t seeking outside capital to grow their businesses:
1. Women don’t like to ask for help or don’t know where to go for it. There are many of us who feel like we don’t need help…we’ll figure it out. We see asking for help as ‘weak.’ On the other side, so many people I talk to seem to struggle finding the right resources to help them build their concept into a viable business.
2. Many women start businesses for flexibility and control and resist outside assistance that might disrupt that. Taking money from someone to grow a business requires a willingness to give up some control, or at a minimum welcomes outside scrutiny of our efforts. What will an outside investor say if I decide not to go after a big contract because I want to control my growth for personal reasons?
3. They don’t think BIG enough. Prior to starting and growing my business, I just never thought I had the personal or financial resources to consider buying someone else’s business. Perhaps it was a confidence thing. Once I started to see what I could do I started to think “why can’t I?” I began to think bigger. When we were researching our second business, gluten-free snack foods, we even considered buying someone else’s manufacturing facility when we couldn’t find someone to co-manufacture our product and guarantee a wheat/dairy free facility. Five years earlier, that thought would not even have crossed my mind.
So what has stopped you for looking for outside funding? Don’t know how? And if you’re doing it, what do you see as barriers (if any!)? What’s missing?!
