Starting and running a tech business is no easy feat, and it is particularly difficult for female tech founders. The venture capital industry is still largely dominated by male investors who traditionally provide a majority of the funding for tech startups led by young, mostly male founders. Women tech founders have had to work even harder and be more prepared to secure this critical source of startup capital. Despite the apparent disadvantage, women-led businesses have made impressive strides and have shown strong growth across the tech industry.
In this article, we’ll discuss some of the best ways for women tech founders to secure funding, everything from pitching to investors to working with the right people. No matter your stage of growth, or which sector of tech you are aiming to enter, understanding these strategies can help tech leaders set the stage for successful fundraising for their businesses.
Be Proactive and Know Your Stuff
One of the most important steps that women tech founders need to take when seeking funding is to be proactive and be knowledgeable about their business. Many successful founders with profitable companies have an in-depth knowledge of their industry, their competitors, and the overall ecosystem of tech that surrounds their product or service. This knowledge is not just important for successfully running a company but is also key for having successful and meaningful conversations with potential investors.
Knowing the ins and outs of your business also means keeping up with industry news, trends, and developments. Your understanding of the market can be essential for telling a good story to investors, one that is factually backed up, and that shows that you have the expertise and experience to lead your business to success.
Being knowledgeable and keeping up with industry trends also gives women tech founders the confidence to sell their ideas and to emphasize the value of their business. Showing enthusiasm and presenting a sound business plan, while also staying mindful of organizational dynamics, can be key activities to unlocking the right kind of investor interest.
Fine-tune Your Pitch
The pitch or initial proposal is the first step for any founder looking to raise capital for their tech company. It is the vital document that allows the investor to understand and assess the potential of the project and provides you with the opportunity to differentiate yourself from other entrepreneurs in the competitive tech landscape.
Pitching to investors requires confidence and a strong narrative, two attributes most women tech founders possess. While it is important to focus on the fundamentals of the product or service and its unique value, which will help make it stand out from the pack, a successful pitch should also profile the founders and their complementary experiences, key staff, and processes.
These elements are all important for investors to understand and make a judgement on, particularly when it comes to the personalities of the founders. Personalities can be a fascinating element of investment decisions, and they can be a major factor in whether the investor will take the chance and pledge funds or not.
Stay Up-To-Date With the Right Resources
Part of being a successful women tech founder is having access to the right resources and being able to use them in your favor. One important digital resource that can be very useful is Crunchbase, a data-driven service that provides comprehensive information on private equity investments, merger & acquisition deals, bankruptcies, and more.
Using Crunchbase, female tech founders can stay abreast of the latest high-profile deals and read about potential new market trends. Crunchbase provides an overview of the entire startup world and can help you spot any new funding opportunities, as well as give you insight into the key players in the industry.
Aside from online resources, face-to-face encounters are essential during the fundraising process. Aspiring tech founders are encouraged to network and attend tech-related events, hackathons, and other gatherings where they can gain a better understanding of the venture capital scene and possible channels of funding.
Moreover, it is always a good idea to find a mentor with deep knowledge of the venture capital system and to speak to experienced female tech founders. The more up-to-date you stay with the right resources, the better chance you’ll have of finding the right investor for your business.
Work with Mentoring and Accelerator Programs
For women tech founders, there are also mentorships and accelerator programs that can be beneficial. Mentorship and accelerator programs are great ways to develop the skillset needed to run a business, from accounting and law to marketing and web development, as well as to connect with the right people who can offer advice and guidance on successful tech startups.
In addition to the professional development, many of these programs will also introduce founders to a vast network of contacts within the tech industry, including investors. For female entrepreneurs, there are even some education-focused programs specifically designed to prepare women tech founders for venture capital fundraising.
For instance, SHE Tech, an initiative of California-based software company Ceridian, offers an accelerator specifically designed to support and grow female-led technology companies. The program has already graduated several startups, many of which have gone on to successful funding rounds.
Look for Alternative Funding Sources
While venture capital is often the go-to for tech founders looking to secure funding, it is important to note that it’s not the only option. Women tech founders can pursue alternative sources of funding including angel investors, crowdfunding campaigns, and government grants.
Angel investors are high-net-worth individuals who are willing to finance promising early-stage companies. Most angel investors not only offer the capital but also the advice and contacts that typically come with a successful venture capital round. Angel investors are particularly popular for tech startups since they are often focused on building the tech community, something that resonates with female entrepreneurs.
If you’re looking for a more hands-off approach, then crowdfunding campaigns can provide an easy way to raise capital. Crowdfunding platforms such as Kickstarter, Indiegogo, and GoFundMe have become increasingly popular, and have allowed tech founders to raise substantial amounts of capital from a wide range of individual contributors.
Finally, women tech founders can also consider government grants and other forms of public funding. There are various grants available to female entrepreneurs, many of which focus on technology, innovation, and leadership. Similarly to the venture capital scene, these female-focused funding sources are still relatively new, but they have already been embraced by female tech founders looking for more accessible and diverse sources of funding.
While the venture capital industry may still be heavily dominated by male investors, there are some significant changes on the horizon for female tech founders. Women tech founders have an increasing number of options for raising capital and are not just limited to the conventional sources such as venture capital.
Be proactive, know your industry, fine-tune your pitch, stay up to date with the right resources, and consider alternative forms of funding such as angel investors, crowdfunding campaigns, and government grants. Making the most of these strategies can be the jumpstart female tech founders need to secure the funding they need to get their businesses off the ground.
