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Why venture capital funding for female entrepreneurs needs a paradigm shift

Women are facing various challenges when it comes to funding and networking.

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Being a woman in the workplace is hard enough. Now try being a female entrepreneur while also trying to get venture capital funding.

The race for starting your business as a female is a difficult one. Statistics show that female entrepreneurs are getting lowered percentages of funding as each year goes by, with only 17 percent of women in North America leading venture capital deals.

Women who are married or single mothers with fantastic higher-education and advanced degrees are all victims of the lack of proper funding for female entrepreneurs. Why is this the case?

Rude comments, sexism, and being underestimated in skill and intelligence are just some of the issues female entrepreneurs deal with when trying to get their business off the ground.

An especially pressing matter is the subject of getting funding. Why is it so hard for women to get financial backing for their businesses and what’s the consensus about making these investments happen?

Why women have limited funding for business

Despite female entrepreneurs making up 30 percent of all small businesses, women are still having trouble getting venture capital funding. One reason for this is that there simply isn’t enough female-backed funding opportunities. In fact, studies show that 89 percent of investors are male; in many cases, this causes women to be overlooked for financing.

One reason is a lack of networking. This is a problem since networking creates opportunities to be seen, heard, and funded. It is estimated that getting business off the ground becomes 30 times harder when you do not have any network contacts.

Why do women have trouble gathering a large network? The answer is multi-faceted.

First, women are less likely to spend extended amounts of face time with male or senior executives. Second, just as studies show that businessmen spend more time with other businessmen, businesswomen like to share the company of other women in business who understand their venture capital funding plights. This makes it difficult to make broad connections in the networking realm of business.

Unfortunately, women are not taken as seriously as men are when approaching companies for venture capital funding. Another difficulty in funding is the impression women give. Where a strong man in business is considered to be respectable, a strong female is more likely to be considered to be intimidating or overly aggressive.

If you are shy, you’ll never make it in business. If you are aggressive and passionate, it comes off as bossy. This gender bias makes it difficult to obtain both contacts and venture capital funding for female entrepreneurs.

Women entrepreneurs

Female entrepreneurs are still at a disadvantage when it comes to venture capitalism. (Source)

How female entrepreneurs can fund their business

The road to finding venture capital funding can be disheartening at times. Whether it’s due to cut funding, sexism, or other financial complications, seeking venture capital funding for female entrepreneurs isn’t going to be an easy road to travel.

But don’t give up! Your business deserves a chance to grow. If you are not having any luck with funding, there are still plenty of ways you can finance your business, such as:

Female-backed venture funds

These are created specifically to support female entrepreneurs. There are much more to discover, so seek some out and see if you qualify for some female empowered funding.

Membership funding

This is usually a private group that is willing and eager to help female entrepreneurs get their business off the ground and help support and celebrate them along their journey.

Online fund pages

Pages like GoFundMe are becoming more popular for receiving funding for business opportunities. There is no shortage of women, both professional and otherwise, who are eager to support female entrepreneurs and women in business.

Grants

Of course, grants are always available to help finance your entrepreneurial dreams. While there are many available, seek out ones specifically owned, backed, and for women in business.

DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.

Monica Gill is a writer who currently maintains a home tuition resource in Singapore. She is passionate about writing and collecting new books. She believes in hard work and it is her persistence that keeps her doing better. She is a perfectionist and doesn’t let go off things that don’t appear perfect to her. She loves traveling whenever she needs time off of her busy schedule. Her favorite holiday destination is Hawaii. 

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