Diversity

How to Get Venture Capital (VC) as a Business Woman

Win VC funding for your female-led startup with these tips on preparation, pitch creation, and positive presentation.

Women growing up and making their business bigger

Min Read

November 30, 2022

If you are a business woman founding a startup, you may feel that the odds are stacked against you. But look beyond the surface stats, because success is possible! In fact, there are effective ways to secure funding for female founders which we will share with you today.

This knowledge is based on Wayra's years of experience with proven female founders. Not to toot our own horn, but when you have time after this article, you can learn more about our strong support for female entrepreneurs over here.

Let's take a look at the current VC situation for women. While EuroNews reported just this year that only 2 percent of venture capital goes to startups led by women, you can find good funding for your business in just a few steps. The demand for female founders is there, so it's just that you have to connect with the right people.

Many business women are also finding success with corporate venture capital. In this way, you can get funding and significant backing for your female-led startup from an established global multinational. Corporate VC quickly connects you with sales, clients, and revenue from the parent corporation, which leads to better cash flow and a solid balance sheet.

Today we'll look at the ways you can prepare your business and your team to get funding. And then, we'll give you some practical steps to capture interest from funders. Let's get started!

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Good News for Female-Led Startups

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Take confidence in the fact that gender diversity leads to higher financial returns. And, female-led startups are less likely to fail, by 50 percent! Your diverse team's dedication and staying power mean once you receive funding, your business is more likely to make money and to succeed.

Corporate venture capital investors understand this data. Many VCs are seeking women-led businesses because of this long-term success data. And they are taking concrete steps to identify and support women entrepreneurs.

The European Investment Bank lists several encouraging strategies emerging in funding entities:

1. Increasing the number of female fund managers and decision-makers. (At Wayra, 75% of our investment team are female business people).

2. Creating dedicated funds and financial instruments to support women’s entrepreneurship.

3. Helping women find the funds and technical advice needed to grow their business.

4. Supporting women entrepreneurs in sectors where they are lacking, such as in high-tech and science, technology, engineering and mathematics (STEM) fields.

Women in business are creating momentum, too. Europe saw a record number of successful exits in initial public offerings, buyouts, or acquisitions, from female-founded startups in 2021. These exits illustrate how corporate venture capital can be a powerful resource for successful women-led startups.

So get encouraged by these positive indicators. Use the data in your presentations and look for investors who already understand the power of female-led business.

You can help your business find the best funding by taking three important steps:

1. Prepare a data-rich pitch deck to guide investors in their decision-making process

2. Research your industry and facts, to be able to answer all investor questions

3. Match your startup with the appropriate funding source

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How Women Can Look For Venture Capital for Their Startup

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Educate yourself! This is the most astute action you can take when looking for venture capital. Just as you know about your business and your product, 1. Learn about the differences among funding sources and, 2. Know what you must present to VCs in order to convince them.

Your female-led business is a good investment, so make it crystal-clear with the relevant facts, data, and product roadmap.

You can accelerate your learning by joining groups and attending events to help women entrepreneurs grow their business. Check out events like herCAREER-Expo and groups such as:

They help founders like you learn more about legal advice, pitch training, payment processes, taxes, marketing, and support programs.

Venture capital (VC) investors look for a solid foundation. Unlike family loans, bank loans, or grants, VC investors want a stake in your business. In exchange for giving you money, they want a stake in the business.

It's up to you to find funding sources that match your goals. Consider all investments, involvements, and exit strategy. And you'll serve your business well by conducting due diligence on the investor and their startups.

Finally, pick a partner with a track record you believe in. Like Wayra, where we are proud to be proven backers of diversity and female-led entities.

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woman can look for venture capital for their startup

Understand the Differences among Venture Capital (VC) Sources

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Each type of venture capital funding source has a different emphasis in how it helps your business. Knowing the differences is crucial! This lets you know how each one will affect your business growth. As well, this wisdom enables you to understand what's right for your business for now and in the future.

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Angel Investors

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An angel investor typically invests in small business ventures at an early stage. This to exchange money for ownership equity in your startup. Unlike a venture capital firm which invests from a fund, angels use their own net worth to contribute to your business.

A few pros and cons with angel investors, which are often private investors, are that:

Private investors can be more patient or less formally structured for some entrepreneurs, extending time frames or allowing for pivots in your goals.
They are also more open to providing smaller amounts for a longer period of time than venture funds.
However, private investors have fewer resources to help you compared with an established corporate venture capital firm.
Finding a public track record for private investors can be more difficult compared with established corporate or institutional funds, which are more public about their activities.

Keep your exit strategy in mind. The private investor is focused on profits, usually through public offering or acquisition. They are typically investing with a high-risk approach, so their needs are different as well! You need to understand their time limit, focus, and strategy if you seek their funding.

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Institutional VCs

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Institutional VC investment comes from professionally managed funds which invest between $25 million and $1 billion in emerging growth companies. So this is the major leagues of big funding!

This funding is best for high-growth companies with a goal of at least $25 million in sales in five years. Your business needs to be well on the way to substantial growth, so verify if this is the case in your financial plan.

But, the supply of institutional funds is limited. These investments go to companies already established within the institutional venture capitalist's portfolio. Though difficult to obtain, startup funding is used to fund a variety of activities, including developing new products and services and expanding existing ones.

Venture capitalists in such entrepreneurial endeavors require substantial equity in a company. The earlier the investment stage, the more equity the institution will require. With this type of funding you are giving up a large portion of future equity ownership, so you can have the funding cash flow right now.

VCs in such institutions are highly selective. A limited number of companies are covered by institutional venture capital, so you are entering a highly competitive field.

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Corporate Venture Capital (CVC)

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Corporate VCs are at a happy balance point between the above two. CVC provides startups with in-depth industry knowledge, cash revenue from clients, and monetary investment. They have the special ability of connecting you to their parent company as one of your major clients. Because of this core advantage, this model has several unique benefits.

Women entrepreneurs raising capital this way have found a powerful resource. And it's great to have the extra support which only a CVC can offer! Female-owned businesses increasingly find this model to be the most effective for them. And this applies at many stages of growing your startup.

The aim of a corporate VC begins in a similar way to institutional VC companies: invest in high-growth companies that create value for the company. But, their organizational structure and long-term strategy is quite different.

Why? The benefit for the parent company is that CVC enables the company get ahead of their competition. This is often done with cutting-edge, disruptive services and technologies. They also have the funds to invest in special research and development (R&D) in the way only your startup can. These ventures give a company more scale in R&D than their internal profit and loss (P&L) allows. And with your special knowledge, you also bring more creativity to new products and services than is otherwise possible.

This is why corporate VCs are organized as an independent arm or as a designated investment team separate from their company's balance sheet. From the strategic perspective, they are looking to bring a technology or service advantage to the parent company ahead of their competitors. So if you are developing an advanced product or service that has potential to enhance the business, technology, or efficiency of a large multinational, they will be very interested in hearing from you.

As well one of the major benefits of corporate venture capital is the element of extended support. Corporate VCs offer infrastructure to help your startup, a network of colleagues for collaboration, labs for experimentation and testing, advice on growth, and great connections which are tough to find elsewhere. Quality people make a fundamental difference in growing your business! So these special connections have enormous value.

And your business receives other benefits as well. This is because you offer the CVC access to markets and talents not otherwise available. So this is a powerful resource for your startup to get new clients and cash flow quickly.

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Prepare Your Business Pitch

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Funding from investors requires sound and forthright data. The days of just having "a good idea" are over in venture capital, at least in the current unsettled financial environment. It takes a lot more than a good idea to succeed!

You need to prove to other people that your businesses is viable. And those other people see things differently from you. So you you need facts and numbers and solid data. Then, you communicate this with a combination of knowledge of your industry, knowledge of your startup, and earned confidence in your presentation materials and communication style.

It's a combination of the inside and the outside: having all that great information stored in your brain's database! Yet also able to express that wisdom visually and verbally in a polished, knowledgable, and friendly manner.

To go more in depth on your pitch-deck, check out the article we have for you here.

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Understand What Investors Want to Know

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Each investor will have specific requirements. And you'll be in competition for those investment dollars. For the best approach, you need to line up your narrative and supporting evidence to gain interest.

You'll have a better chance of success with VC when you prepare well. You and all your competitors are doing the basics:

Hard data and numbers: Investors aren't interested in gut feelings or subjective measures. They want to see the numbers. Present supporting data to back up your business concept. Yet keep the data well-organized and limit the information on a per-slide basis.

Solid strategic plan: Investors want a comprehensive business plan that describes the next six months, one year, and five years. Additionally, analyze the market, sales channel, marketing goals, competitive analysis, and cost analysis. And include detailed insights into the market. When you know your business market, emphasize both how your business fits and how you're unique.

Measure & Metrics: Know all the metrics and KPIs for your industry, your competitors, and for startup financing. What's your customer acqusisition cost? What's the average profit margin in your industry? It's a lot to know for sure! Yet knowing this will help you grow business in so many ways.

Unique idea: An investor needs to know your compelling unique selling proposition (USP). Show how your business stands out from the dozens of competitors competing directly with you for your target market. Imagine you're the client or customer. Then ask yourself: Why would they pick this product or service?

Clarity of Vision: Asking for money from an investor is not enough. Be specific. Investors want to know how much money you need, where that money will go, why it should go there, how much value it will yield, and when it will deliver a return on their investment. How does this all fit into your overall vision? Be able to explain your core vision in a few sentences (around 30-45 seconds).

Make it Now: Regardless of the stage of your business growth you need this now! Summarize your key value statement into a short elevator pitch (around 30-45 seconds). Explain the problem, solution, your USP, and a key metric, in easy-to-understand language. End it with a relevant question, like, "Could this be helpful for your business?".

Yes, it's a challenge! Yet this will help both you and the people you speak with to understand your landscape.

Then, clarify your business concept into a short startup pitch deck (15 slides). Even if you aren't looking for an investor today, organizing this info now will help you focus your growth and your priorities, so you can reach more success even sooner. Succinctly explain the problem, solution, marketing timing, and your special magic. Then learn how to polish your pitch deck over here.

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Go Beyond Basics

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Preparing the basics puts you in the running with your competitors. So invest your time well here! Make sure your preparation is well-rounded. You are asking for money, which investors take seriously. Make sure you specify what you need, why, and how the investment capital will be applied in your startup.

Be bold. This is one way women can improve their requests for funding. So be bold! In general, men seem to do this naturally in their funding requests. Women tend to be more conservative or cautious, basing their requests on numbers. But if you have big plans for your startup, be bold when sharing your vision and goals.

Follow great female business presenters and see what you can learn from them (for example on Bloomberg.) One popular favourite is Francine Lacqua because of her clear voice, clarity, and consistency.

Then get into the details. Where can you stand out in each of these fundamentals?

A. Your Unique Product. Differentiate your product in detail. Be specific. Having clarity translates into solid branding, messaging, and future sales. Create a clear and succinct vision statement for your woman-led company. Practice this with friends, colleagues, or a coach. t should be a powerful yet understandable 30-45 seconds.

B. Verify Your Numbers. Do your own due diligence to make sure your numbers are correct. Have your financials audited or reviewed by a trusted person in your field or other relevant expert. The numbers will be objective, and you'll appear more professional. When your numbers are strong, you have more leverage. And you have more clarity on what you need for fiscal success.

C. Minimize Costs. Make sure you can demonstrate how well you manage the funds you have at the moment before asking for funds. You'll reassure the investor that you can, in fact, manage money. What planning, procedures, and controls are applied?

You will increase your profit margin when you minimize expenses. Investors also see you as a skilled manager of funds, reassuring them you won't squander their investment. In this way, you demonstrate your fiscal responsibility and how you apply the investor's funds to accomplish your vision.

D. Clear, Documented Goals. Your business goals must be specific, measurable, and in line with your unique product (USP). Some vague goals, such as "increase revenue" or "launch a new product," aren't compelling. Get specific!

E. Narrate with Appropriate Emotion. To be compelling, you need to live and breathe the facts, and still be yourself. And of course, keep your personality, as your authenticity should shine through! Balance the emotions of relaxed confidence and urgency. And sprinkle just a bit of appropriate emotional energy at relevant points. Because as much as we like facts and data, humans close their final decisions based on emotional factors.

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Strong Numbers Support Your Startup Story

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Your startup story and your numbers work together. You need numbers to back your story. You also must convince your investor that tge numbers are sustainable by creating an engaging story. Consider the story of the marketing, the timing of the current market cycle, and the prognosis.

And consider risk! Because the current market dynamics require startups to present themselves as less of a risk than in the past. Sustainable growth and good unit economics are part of reducing risk.

At the same time, compelling arguments about why you will be relevant in the future and will win the market over the long run are convincing reasons for investing now. You will need to anticipate the market's demands in the future as well as meet immediate market demand. How will your business accomplish this?

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Sell Your Business Future to Win Investors

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Asking for investment in your startup is a big deal! This is a keystone sales presentation which will changes the lives of many people. So you need to convince the corporate investor that your business will is needed, viable, and profitable in the present and future you will outline.

Think of your business story by Investing in thought leadership. Show the market that you're knowledgeable and can predict how things are going to progress. Investors and customers should feel that you are the future; that you can adapt to the future, and that you are changing it. Convey that feeling with appropriate emotion, which shows that you are confident and that you care about outcomes.

Invest in your long-term product development. It's tempting to develop features based on demand at the moment and whatever will make you meet the targets for next month. Your business must both stay viable now with current numbers, yet also deliver big wins in the future.

To do this, take into account how your product(s) will meet demand in 6 months, 1 year, and long-term time horizons. Which future needs can you anticipate? What can you offer people that they didn't know they needed?

Meanwhile, if you develop a button that nobody uses anymore, you spent developer resources without a future. Nobody likes dead ends! Instead, you can invest those funds on something innovative that will guarantee your growth six months from now. Thoroughly analyze those future needs.

Let your vision be your guide in selling your startup. Think about how your thought leadership and product development embody your vision and point you toward the future. Then, polish your presentations to be your best, and show the true power of your business idea.

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Mindset Matters When You Pitch

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When you've done your homework researching potential investors, creating your vision story, and gathering supporting data, your next step is to pitch your female led business to investors. Your pitch deck collects the information you present in a logical, organized format to help investors visualize your business goals. At Wayra, we provide not only sample templates, but a sample mockup so you can see what one looks like.

Your pitch is not only about your business but also about you as a female founder. Once you put your pitch deck together, write your narrative to accompany the slides. Yet remember, never read slides! The slide is the picture while you are the storyteller.

Stay Positive

As a female business owner, you may be tempted to emphasize the negative funding environment. Don't. Do. That.

Focus on the benefits your business will provide, the solid numbers, and the future you envision.

In a recent article on presentations, American Express cautioned:

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There's a fine line between showing intense passion for your idea, product or service, and showing nervous fear of losing out. While a little anxiety is understandable, letting it take hold of you will work against you. It can make you adopt an attitude of begging, which can do more harm than good.

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Tell Your Story With Enthusiasm!

The expression of genuine enthusiasm is the expression of our true or authentic feelings. Your authenticity as an entrepreneur will shine through your pitch when you deliver with enthusiasm.

Tell the story of your business!. Mention your diverse team. And polish your pitch.

Inject enthusiasm at appropriate places:

A brief history of your competitve marketplace and the problem which isn't solved
The magic solution your team has created which is effective and compelling
What do you solve today? Which things do you solve tomorrow? Why are you optimistic about this?
Be enthusiastic about growth! How fast can you grow now? What is the total addressable market (TAM) in your current region and other regions? What's the potential after 3-5 years from now?

A factually based enthusiasm for your business will help investors gain interest in your female-led business. You know your business better than anyone! And your enthusiasm for the possibilities is a strong signal for investors.