Raising Money While Female In 2022 – 6 Tips From An Investor, Entrepreneur, & Scientist

Between the pandemic changing our ideas of ‘work’, the increased focus on values ​​and the resulting ‘Great Reshaping’ of careers, more women are becoming entrepreneurs. The World Economic Forum 2022 Gender Gap study reports that “women opened 49% of new businesses in the US in 2021, up from 28% in 2019.”

Unfortunately, the path to raising capital for these female entrepreneurs is bumpy at best, as female founders receive only 2.4% of venture funding, according to a recent report from Pitchbook.

There are more female investors and investors looking to invest in companies founded by women than ever before, but the criteria they use are the same. It doesn’t seem to reflect what women ‘do’ entrepreneurship, or what women value – or, in some ways, where the workplace and business are evolving post-pandemic, 21St century, ESG-centric economics. ESG is about environmental, social and governance, related to impact, accountability and transparency, as well as diversity of ideas and teams.

A business is still a business, and the purpose of a business is to raise money, so women entrepreneurs who want to raise outside capital to grow faster need to know the tricks of the trade.

Here are six tips on how to prepare to attract investors from a female investor who has been there as an entrepreneur and scientist and is now part of the executive team of a corporate venture capital firm. Ginger RothrockPh.D., HG Ventures (From an exclusive interview on the Electric Ladies Podcast):

1. “Do you understand what customers are looking for?”: Rothrock says to ask this question as you prepare your fundraising approach and pitch to investors. He suggested understanding: “What are your customers saying?” He warned that many people don’t listen enough to what their customers really need. A lean startup method of customer discovery can help a lot.

2. Find a small niche to stand on: “If you’re targeting a market with a very long tenure,” Rothrock advised, “are there smaller niche markets that you can get into sooner?” “Almost always there is,” he added. This includes understanding the supply chain and sales cycles.

3. “Do you know where you want to go?” Understanding how you make money is a job. Then predicting or modeling what your financial opportunities will be over time can be a major stress point for entrepreneurs, especially women who think they need to know exactly how to get there every step of the way (not you). Rothrock says there are two approaches to this: “The financial model is often the numbers side of your story. It’s a story through numbers,” he said. One approach is: “What are the key milestones you can hit 18 to 24 months from now?… Maybe it’s a pilot with a company, maybe it’s manufacturing at a certain scale, maybe it’s like building a team of a certain size . . .You must have a very solid goal post there.”

“Then you take the opposite approach. Well, if I had $2 million, what would I do with it? If I had 5 million dollars, where would I go, if I had 10 million dollars?… if I had that much now, where would it get me?”

4. “You should list every assumption you have”: What is your supply chain? What are your costs? How will the market change over time? What will happen when the price of oil goes up or down? Which new law or regulation will affect your business either way? What changes do you see in the market? How will the new SEC climate risk disclosure rules affect your opportunities or risks?

5. Tell your story: Tell the story of your business in words and numbers, advises Rothrock. “People have to be creative with either their business model or their focus areas, their go-to-market strategy, to try to predict revenue, because at the end of the day, yes, we’re looking for revenue,” Rothrock explained. “We want to see that you…have a path to real growth. And sometimes this growth is not only in one market. You often stack markets on top of each other to pave the way and tell a story, because it’s all about telling a story. Explain what customers have told you that confirms this story line, “early signals that these are real markets, too.” They may end up being smaller than what you were going for, but the story of growing your business is a process.

6. Research and interview the investor beforehand: You also have to decide who you want to work with, Rothrock emphasized. He said the best entrepreneurs he talks to prepare by doing research on his firm and understanding what they want from the firm besides money.

“What would you do if you were fearless? What choices would you make? What actions would you take?… We (women) outperform men, get better grades. We learn that hard work pays off… (often we do) making professional choices because of a perceived need or what I should be doing… (But) what if I could do anything I wanted? That’s the last question Ginger Rothrock wants us to answer.

Listen to the full interview with Ginger Rothrock on the Electric Ladies Podcast here.

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