Challenges women entrepreneurs face and how to overcome them
1. Defying social expectations
Most female business owners who have attended networking events can relate to this scenario: You walk into a crowded seminar and can count the number of women there on one hand. When women entrepreneurs talk business with primarily male executives, it can be unnerving.
In this sort of situation, women may feel as though they need to adopt a stereotypically “male” attitude toward business: competitive, aggressive and sometimes harsh. But successful female CEOs believe that remaining true to yourself and finding your own voice are the keys to rising above preconceived expectations.
“Be yourself, and have confidence in who you are,” said Hilary Genga, founder and CEO of Trunkettes. “You made it to where you are through hard work and perseverance, but most importantly, you’re there. Don’t conform yourself to a man’s idea of what a leader should look like.”
2. Accessing funding
Not all startup founders look for investors to help get their businesses off the ground, but those who do know how difficult the pitching process can be. Raising capital is even more difficult for women-owned businesses. A 2014 Babson College report found that less than 3% of companies with venture capital funding had female CEOs.
Bonnie Crater, president and CEO of Full Circle Insights, said venture capitalists tend to invest in startups run by people of their own “tribe.” For example, a Stanford-educated investor will want to back a Stanford alum’s business. This means that VC firms with female partners are more likely to invest in women-run startups. According to the Babson report, however, that accounts for only 6% of U.S. firms. Crater recommends that women looking for business investors should build confidence through a great team and business plan.
Investors typically look for businesses that can grow their valuation to more than $1 billion, Crater said. “Think about how to do that. If you have experts on your founding team that can execute the business [operations] well, investors will have confidence in those people. [You also] need a good product-market fit.”
Another way to overcome this issue is to get more female investors to support one another, said Felena Hanson, founder of the Hera Hub coworking space for female entrepreneurs. According to Hanson, groups like hers are “looking to not only inspire and encourage female investors, but to grow and support other female entrepreneurs through both funding and strategic educational workshops.”
Female entrepreneurs can raise the necessary capital for their business by learning to ask for exactly what they need, even if that means requesting more than what they want.
“Women are more conservative and don’t overstate projections,” said Gloria Kolb, CEO and co-founder of Elidah and a mentor in the University of Connecticut’s Technology Incubation Program. “When we pitch investors, we are often pitching realistic numbers. But men so often overstate and exaggerate that investors often discount the numbers off the bat.”
Kolb said that investors, who are usually men, tend to assume that the women entrepreneurs are operating just like the men and inflating their numbers. Therefore, they will provide funding at lower levels than requested. Women need to understand this dynamic and approach their pitches accordingly.