Ever had a business idea so good it hit you like a ton of bricks because you realized there was no way you'd raise the money for this crazy venture?
You're not alone. There are thousands of women who've had the same thought - "I just can't gather that kind of capital." Business is so competitive and fundraising is one of the scariest things you'll ever do as an entrepreneur, so naturally people shy away from the prospect.
And of course as a woman, you're not approaching VC's on a level playing field. It's statistically proven women have a tougher time securing funding from investors than men, thus adding to that scary fundraising nature. Karen Cahn, CEO and founder of crowdfunding resource for women, iFundWomen, recognized the gender gap in the fundraising game and decided to do something about it.
iFundWomen is a useful resource and tool for women looking to start a business but not ready to begin reaching out to big firms for capital. Crowdfunding is an inexpensive way to navigate the beginnings of a new business and has been put to great use by many entrepreneurs SWAAY has featured since we began telling these incredible entrepreneurial stories. Below we talked to Karen about why it's vital to have such a platform as iFundWomen in today's business sphere and how women can get their pet projects off the ground with some smart crowdfunding.
1. What is iFundWomen and what problem are you solving?
iFundWomen is a crowdfunding platform built exclusively for women-led startups and small businesses. Our platform was created in response to the very real funding and confidence gap that female business owners are faced with. It's a massive problem that only 2-6% of venture dollars go to women and we are committed to doing something about that.
2. Are all crowdfunding platforms created equal? How does one choose?
If you are a female entrepreneur who is looking to raise capital for your business, iFundWomen is the right platform for you, plain and simple. iFundWomen is unique in very important ways. First, we address the confidence gap that women entrepreneurs face with crowdfunding coaching for anyone who needs it. Second, we help women tell the story of their businesses through professionally-produced videos. Women typically don't like to promote themselves, so we are helping them get their story across. Another way in which iFundWomen is different is through our pay-it-forward model where we directly reinvest 20% of profits from standard fees into live campaigns on the site, which creates a virtuous cycle of funding for all.
3. Many founders are afraid of crowdfunding. What do you attribute that to?
Crowdfunding is a lot of work and we know that first hand. Our team successfully crowdfunded for our startup last year and it was through that experience that we discovered just how laborious the whole process is. We also found that there was very little guidance offered as we prepared and carried out our campaign. I think women in particular are hesitant to crowdfund because they bear the burden of the confidence gap. As I mentioned, women don't as readily promote themselves or their businesses among their friends, family and followers (their “FFF's"). Having the support of your FFF's is crucial to a successful campaign.
You have to get out there and be the face of your brand or idea. Furthermore, you often have to make a video to support your crowdfunding efforts and that can be a really daunting task for many people. iFundWomen's mission is to provide all the services and guidance possible to help women overcome this confidence gap and successfully crowdfund for their businesses.
4. Does crowdfunding interfere with raising capital from VCS or investors?
Quite the opposite. Crowdfunding is quickly becoming the means to a future round of investment for your business. More and more VC's and investors want to see that you have a successful crowdfunding campaign under your belt before they will even consider investing in your company. They want to know that there really is a need in the market that you are fulfilling with your business.
5. What are some tips you have for women looking to crowdfund?
Our number one piece of advice to women looking to crowdfund is to round up those FFF's before you launch a crowdfunding campaign. It is imperative that you have a network of supporters lined up so the second your campaign goes live, you are inching towards your goal. The hard part is keeping that momentum up throughout your campaign, and that's where iFundWomen's coaching services can be immensely helpful.
6. What advice do you give a founder whose crowdfunding campaign seems to have plateaued?
There comes a time in every crowdfunding campaign where you are confronted with the trough. The period where all those donations start to taper off and you start to panic at the thought of not reaching your campaign goal. This can happen multiple times throughout the length of a crowdfunding campaign. As exciting as it is to celebrate the highs during your campaign, it's equally as important to anticipate these lows. It's all about preparation and posting, constant contact with your network through email and social media is an absolute must. This means you need to be prepared with content for your updates so, for example, having new rewards to roll out during your campaign is a great reason to reach out to your supporters.
There's so much to say about the trough, but just remember that the trough is temporary and tomorrow is a brand new, potentially great day for your campaign!
WRITTEN BYAmy Corcoran