Funding still a challenge for female entrepreneurs
This is according to Gugu Mjadu, spokesperson for the 2019 Entrepreneur of the Year competition, who refers to a report published by Barclays and the Female Founders Forum, which found that men are 86 percent more likely to access venture capital investment than women.
“Yet global research shows us that women tend to do better with the business finance they get,” says Mjadu, citing a recent US study by Boston Consulting Group, which found that while women generally receive less finance, they produce more revenue per dollar funded.
One local female entrepreneur, who has first-hand experience with the challenge of raising capital, is Phillipa Geard, chief executive and founder of RecruitMyMom, and a previous Entrepreneur of the Year competition category winner.
“There are companies and investors who have capital to invest, but the right information is hard to find, especially for women, who, unfortunately, tend to be less connected than men are in this regard.”
Geard admits that she was unfamiliar with the whole concept of business finance at the start of her entrepreneurial journey. “I had no idea where to start looking for capital to start a business. I just had an idea and never thought about the fact that raising capital was an option. As women, we are often risk averse, so anything requiring risk felt scary.”
To help other aspiring female entrepreneurs, Mjadu offers the following tips on how to gain access to business finance:
1. You'll never get business finance if you don't apply. A major contributing factor to the gender funding gap, is the mere fact that not enough women apply for capital, says Mjadu. “Women tend to be more risk averse than men, which is not necessarily a bad thing. However, this risk prevents female entrepreneurs from taking the first step and applying for capital, which can limit the growth of an otherwise thriving business.”
2. Explore all possible funding avenues. “Whether it be through savings, business loans, financial grants or support from family or friends, it is important to explore all your options and identify the best funding avenue for you and your business,” says Mjadu.
“There is no one-size-fits-all when it comes to financing a business, and you'll need to do research and talk to other entrepreneurs to find out what's out there.”
3. Network, network, network! Mjadu urges women to get out there and connect with other business owners and potential financiers. Echoing this sentiment, Geard says any exposure is helpful. “Start networking so you can find out who to speak to about access to business finance.”