The month of March is Women’s History Month, and, while many women of color have made significant strides in launching their own businesses, some of them still face challenges with raising capital. In fact, studies show that only 15% of all women-run companies succeeded in raising capital.
[Related: Black Female-Owned Job Matching App Raises $ 100,000 in Startup Financing]
However, there are a number of progressive women who are demonstrating that there is more than one way to shatter this statistic, and numerous approaches to growing a business and raising capital. One way is by using the popular “Shark Tank” approach and the other way is by using the “Dolphin Tank” approach.
Jean Brownhill Lauer, founder and CEO at Sweeten, who has raised $ 4.3 million in funding, had these tips to share with women seeking to raise money and win over investors using the “Shark Tank” approach.
Show That Your Target Market is Huge. Make sure your pitch establishes a huge market size and clearly articulates your idea for owning it. Your target market needs to be so big that rounding errors are in the hundreds of millions. In addition, your product or service needs to be so clearly necessary that it’s obvious to everyone.
Start With the Big Picture. Start the conversation with investors at the broadest view of your idea and then slowly bring the idea into focus to demonstrate where you are right now. They need to believe in the overall idea and the steps you plan to take to get there, and then they need a realistic look at where you are right now.
Find the Balance Between Fear and Overconfidence. Both fear and overconfidence repel investors. Do all the prep work on your plan and yourself to truly have the confidence you need to face people, show them the size of the opportunity and the traction of your work, and ask them to trust you with millions of their dollars.
Vanessa Wakeman, founder and CEO of The Wakeman Agency, who started her venture with self-funding and grew her business to be a leading social impact marketing and PR company, had these tips to share using a “Dolphin Tank.”
Invest in Yourself. Don’t be afraid to take the risk of investing in yourself by pulling from your savings. Be sure to set parameters on how much money you can “borrow” from this source, so that you don’t completely liquidate all of your funds. As your business starts to take off, remember to “pay yourself back” by putting a portion of your proceeds back into your savings to replenish these funds.
Consider A Microloan. Microloans (typically $ 50,000 and under) could be a great option for funding a business. As compared to traditional loans, these loans tend to be easier to get and can assist you with covering some of your initial startup costs. Recommended resource: ACCION USA, a nonprofit organization that offers small business loans up to $ 25,000.