No Startup Capital Funding for Women? What to Do About it
- Amir
- Feb 6, 2023
- 4 min read
Updated: Feb 11
Despite the growing recognition of the importance of diversity in entrepreneurship, female founders often face significant challenges in securing startup funding with a limited availability of female mentors.
According to Digital Digest/Wamda, Startups in MENA raised about $4 billion in 2022, a 24% increase from the prior year. An anemic 1.3% of this capital raised went to funding for women founders.
Here are some reasons why funding for women founders remains slim. Understanding these barriers can help in developing strategies to overcome them.
Gender Bias in Investment
Unconscious Bias: Many investors may unconsciously favor male founders, viewing them as more competent or capable.
Limited Representation: The lack of female investors can lead to fewer opportunities for female entrepreneurs, as investment decisions by male investors without any female investors may not reflect diverse perspectives.
Stereotypes: Traditional stereotypes about women and their capabilities can influence funding decisions negatively and reduce funding for women overall.
Access to Networks
Networking Barriers: Female founders may have less access to influential networks that can lead to funding opportunities.
Mentorship Gaps: The scarcity of female mentors in the startup ecosystem can hinder female entrepreneurs from receiving guidance and support.
Business Model & Funding Perceptions
Industry Bias: Female-led startups may be concentrated in sectors perceived as "less lucrative," such as non profit or wellness, which can affect investor interest.
Risk Aversion: Investors may view female-led ventures as requiring a high risk appetite due to stereotypes about limited women's success stories, and as they avoid investing, that's less funding for women.
Smaller Investment Rounds: Female founders often receive smaller funding amounts compared to their male counterparts, limiting their growth potential.
Less Follow-On Investment: Female-led startups may struggle to secure follow-on funding after initial rounds, impacting their long-term viability.
While the odds may feel stacked against female entrepreneurs launching a new business, but they are not. It just means doing a little more homework. Opportunities are still massive.
Tips and Suggestions
While there is a lot that can be done, here are few areas to help you start to engage:
0 - Welcome setbacks
Before starting, setting the mind set is key. Setbacks must become your best friend!
They are simply inevitable when you're building something new. Embrace failure as a necessary step toward success as each failure will provide you with a fabulous opportunity to learn and grow.
For example, moving a business to sustainability requires a lot of hard work, resilience, access to know-how and more. Even with all of it, sustainability remains a big challenge for young startups.
1- Create and market a solid business plan
Use a business plan as your roadmap for your business success.
Start With a One Pager Business Plan. Is that even possible?
Yup, for sure!
Doing the One Pager forces you to think about your initial business idea and if the business model is viable before you invest heavily in it. What exactly are you trying to achieve? What are your short-term and long-term goals? How will you make money?
By putting these thoughts on paper, you create a vision that will guide your decisions.
Outline your strategies, your why, your projections and budgeted cash burn out. Include a marketing plan, scenario analysis, and a plan for growth.
One of the biggest and most expensive mistakes entrepreneurs can make is doing little or no research. What does market research entail, why is it key for entrepreneurs, and how to get it done with limited resources? For more details, you can deep dive on Market Research and Insights.
Make sure to include your stakeholder engagement and the network of professionals you plan on getting the buy in from.
2- Entrepreneur Programs, You Can't Miss
Check out Blog that list of fabulous UAE programs, various competitions offering prize money for entrepreneurs, as well as popular entrepreneur events, including Expand North Star.
Each opportunity has specific requirements, deadlines and links are provided so you can apply.
Also, be sure to access free resources. For example, carefully estimate your business expenses for the up coming year, or use a template such as basic Startup Capital Template. Using templates saves time, while getting you to create investor/lender-ready material on a click. There is no need to re-invent the wheel!
3- Pitch, Pitch and Pitch again
Women entrepreneur's don't pitch enough; Step out of your comfort zone and don't be afraid to push your boundaries. Pitch your business to partners, to advisors, to clients, to board members and finally to investors.
It may be intimidating at first, but will get easier and taking risks can lead to incredible rewards for your business. If you want to become a female mentor, join our team of amazing experts here.
Just getting started in your business journey?
Take the Next Step: Book a Free Demo!
The exhilarating journey with urbizassist is a click of a button away. Your reliable partner in the realm of entrepreneurship will equip you with practical strategies and insights to steer your startup towards sustainability and expansion, making every milestone a reality.
urBIZassist believes in the power of "know-how" to transform lives and positively impact the world around us.
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