Finding Early Stage Investors for Female Entrepreneurs

Finding Early Stage Investors for Female Entrepreneurs
Finding Early Stage Investors for Female Entrepreneurs

For the longest time, women entrepreneurs have seen only a tiny part of the pie that is venture capital funding. The female venture capital leaders today are working to change that. Different types of early-stage investors offer enterprises and startups financial aid in exchange for part ownership in the company. An investor could be an individual or entrepreneur with a high stock of personal resources, an investment group or company specialising in such business opportunities, or even local community organisations that have been created for boosting small businesses in a particular area. 

In any case, funds are limited whereas new businesses come up every single day. Which of these businesses will receive funding will depend on the viability demonstration by the entrepreneurs themselves. 

Finding Investors for Female Entrepreneurs:

1. Demonstrate Feasibility of the Business – 

To begin with, women entrepreneurs need to prove before a group of investors that their product is worthy of entering the market. You might need to create a concept or prototype while you present. You will also have to show your finance and business model. How and how much are people paying for your product and why? What are your plans for scaling up? 

Consider an example. You might develop a product and identify your audience. Before you reach out to investors, you will need to figure out how to make this product a successful business venture. Is there a marketing plan or sales plan? How will you roll it out?

2. Approach Investors – 

Don’t think of going to investors before you have answered all the questions mentioned above. You will also need to know whether you have competition in the market and who these businesses are. You will need to present to investors who your top competitors are, how your idea is differentiated from the others and how big your product’s market is. Any investor you interact with is looking for a good business opportunity. With a higher market size and the right type of product, your chances of securing funding in the early stages of your business are pretty high. However, keep in mind that investors are looking for businesses to invest in that show promise of growth. Most investors aim to earn approximately 3x to 5x of their investment amount in 5-7 years.

3. Approach Friends and Family – 

Family and friends can be useful as initial investors in your business venture. If your business is successful, everyone wins! Many women entrepreneurs have supportive family members and friends or colleagues who they rely on. If you have a marketable business idea, you can tell them your vision and show them your future goals and business model. 

This model of early-stage investment is ideal for businesses that are still in the pre-startup phase. There are some pros and cons to this method that you should know about. The biggest pro is that the investor knows you personally, so you don’t need to try too hard to prove credibility. Also, family members are more understanding in case your business doesn’t take off immediately. It makes for a good starting point where investors are concerned, you can always get new investors later.

However, if your family or friends are not entrepreneurial in their mindset, it might be difficult to secure funds. It becomes challenging to show them your vision in such a case. You should also ensure you are approaching only close, trusted people who won’t back out at the last minute. 

4. Make the Pitch Perfect – 

Your business idea might be huge, but you will have barely five to seven minutes to present it to a potential investor. Some entrepreneurs make the mistake of cluttering and adding too much information and background into the pitch deck. However, what investors are looking for is proof that you understand the domain and your business idea perfectly and that you will deliver on your promises of returns.

This is the fundamental information that you need. There are untapped and unlimited opportunities out there for female entrepreneurs, so now’s the time to make your next move.