Today, women are bursting with entrepreneurial spirit—recent reports suggest they are starting businesses at twice the rate of men. If we were to follow them on their journeys to building their ventures, what would we witness?
Let’s start with the good news. In 2021, Venture capital (VC) funding for U.S. startups exceeded almost $330 billion, breaking all previous records. And of that, a mind-blowing—and recording-breaking—$6.4 billion went to female-only businesses.
More good news: those billions represent a whopping 83% more than what women-founded companies raised in 2020.
But now the bad news. Businesses started by women received just a meagre 2% of the pie—that’s the smallest percentage since 2016. For the last six years, women’s ability to compete for the big bucks alone has been steadily dwindling.
Like most news for women starting their own businesses, this reinforces that they face more challenges than their male counterparts. A case in point: women-owned businesses with a male partner on board had no trouble securing VC funding.
Now, women business owners are tough—they have to be. And getting funding isn’t everything. Other resources are needed for women entrepreneurs to find success. Training, education, advocacy, mentorship, help developing their networks, sisterhood, and more are required. But nothing gets done if you don’t have capital. That comes first.
In this blog we’re going to focus on funding—specifically through grants, investments, and competitions—available only to women entrepreneurs.
Today’s hot funding list for women
The Amber Grant program was established by WomensNet in 1998 in memory of Amber Wigdahl, who had dreams of starting her own business, but tragically died at age 19 before being able to fulfill them. Today, WomensNet gives away tens of thousands of dollars every month to burgeoning women business owners. It chooses its winners—who can get a $10,000 Amber Grant, a $10,000 “business category” grant, $2,000 “mini-grants,” or other free money—on the basis of a brief, easy-to-fill-out application in which women entrepreneurs describe their businesses and their dreams. Here’s the total list of grants. And here’s the application form. There are no strings attached to the money, just a good-spirited suggestion that the winners “pay it forward.”
Astia, a global nonprofit founded in 1999, operates on the belief that inclusive teams outperform those that have exclusionary homogeneous cultures. It invests in high-growth companies with women leaders. Acting on this foundational conviction, Astia aspires to level the playing field for women seeking funding for entrepreneurial ventures. It has three investment offerings for women entrepreneurs: Astia Fund, Astia Angels, and Astia Edge. Astia Angels are a group of accredited investors who invest in very early-stage startups. The Astia Fund is a traditional venture capital structure, but an unusual way of networking, evaluating, and selecting candidates for investment. This proprietary method is called “Astia’s Expert Sift.” Astia Edge invests in seed-stage companies led by Black and Latina women.
In all cases, Astia leverages its expertise and network to help underrepresented entrepreneurs get the funding they need.
The Cartier Women’s Initiative is an annual international entrepreneurship competition that aims to drive change by empowering women entrepreneurs with businesses from one to three years old. Founded in 2006, the competition is open to women-run and women-owned businesses from any country or industry. The business does not have to be profitable.
To apply, go to the award page of the website. Every year, three women-owned businesses are chosen from each of 10 global regions. There is a $100,000 grant for each first-place winner, $60,000 for each second-place winner, and $30,000 for each third-place winner.
Eileen Fisher, the clothing designer and retailer, is also a source of funding for women entrepreneurs. They award $200,000 annually in the form of grants ranging from $10,000 to $40,000. The goal specifically is to fund women raising awareness or starting businesses related to sustainability.
To be eligible, applicants must meet with one or more of these key objectives:
- Increase women’s participation in decision making
- Train women and girls in climate change adaptation, mitigation, and advocacy
- Engage women in the sustainable economy
Female Founders Fund is an early-stage fund that invests solely in women-led businesses. It prefers to invest in innovative “category-defining” startups that are trying to challenge and reshape their markets. Founded in 2014, it is a leading source of institutional capital for female entrepreneurs and has raised seed capital worth more than $3 billion. Female Founders Fund believes in building relationships and getting to know founders months before the formal fundraise begins. For information on how to prepare a pitch deck, go to the FAQs on its website.
National Association for the Self-Employed (NASE) Growth Grants are $4,000 grants awarded to help smaller businesses with less than $75,000 in sales with business development expenses such as expanding facilities, hiring employees, marketing, advertising, and other needs. Since 2006, NASE has given out more than $1 million in grants. To qualify for a NASE growth grant, you need to be a NASE member in good standing. To learn how to become a member and apply for a grant, go to the membership page on the NASE website.
Plum Alley Investments has a simple goal: to get capital to the most promising women entrepreneurs. It is especially interested in investing in businesses with technological or medical breakthroughs with the potential to affect humanity. As of May 2020, Plum Alley has invested more than $25 million, 100% of which is in STEM (science, technology, engineering, or math) fields with at least one female founder. The average investment size is typically $500k to $1.5 million.
Two steps forward…
Today, 31% of all small business owners are women. This is 4% higher than last year (27%). And women outpaced men in starting businesses during the dark days of the COVID-19 pandemic. Why are they doing it? A plurality (29%) simply said they were ready to be their own bosses. One-fifth (20%) wanted to pursue their passion. And 13% said they were dissatisfied with corporate America.
Despite these promising signs, women are still having trouble getting their hands on the necessary capital for starting and running a successful business. It’s time for this to change. Happily, a growing number of organizations, in attempts to level the playing field, are offering women-only businesses chances to get grants, investments, and seed money to follow their dreams.