Women-owned businesses are on the rise. Women started 49% of new businesses in the US in 2021. While this is cause for celebration, it’s also important to note that these businesses often face unique challenges when accessing capital. In 2021, women received only 2.4% of venture capital funding, which proves that crowdfunding can be a powerful tool for women.
What is crowdfunding?
Crowdfunding is raising capital for a business or project by soliciting small donations from many people. These days, crowdfunding is often done online via platforms like Indiegogo. However, it’s important to note that crowdfunding is not just for startups—established businesses can also use it to raise money for expansion, new products, or other purposes.
Why crowdfunding can be powerful for women-owned businesses
There are several reasons why crowdfunding can be especially powerful for women-owned businesses. Crowdfunding levels the playing field when it comes to access to capital. Traditional lenders have long underserved women-owned businesses, so crowdfunding provides an essential alternative funding source.
Crowdfunded projects often benefit from increased media attention and consumer awareness, which can help grow a business. Many people enjoy supporting companies that women and minorities own—so crowdfunding can also be a great way to connect with potential customers and build your brand.
In speaking with Becky Center, CEO of Indiegogo, she offers the following tips when seeking crowdfunding:
1. Stay authentic
As you think about crowdfunding to support your latest project, it’s important to remember that people want to invest in stories and causes they believe in. Be authentic in your approach and take the time to share your story with potential donors. Why are you passionate about this project? What personal connection do you have to the cause? When people can see how deeply you care about something, they’re more likely to want to support your efforts.
2. Set goals
Being genuine doesn’t mean you should be shy about asking for money. It’s essential to set a clear financial goal for your campaign and make it easy for people to donate. Be sure to thank donors for their support, no matter how big or small their contribution may be. Remember to follow up after the campaign to inform people how you used their money and its impact. When you stay authentic and transparent throughout the process, you’ll be more likely to build long-term relationships with supporters who invested in your success.
3. Do your research
When you’re seeking crowdfunding for your business venture, it’s essential to research and come prepared. You will need a detailed business plan that outlines your goals, strategies, and financial projections. You’ll also need to have a solid marketing plan detailing how to promote your business and attract customers.
4. Seek support for your campaign
Seek support from others who have experience with this type of fundraising. Some resources can guide everything from crafting a compelling pitch to developing a marketing strategy and services that connect you with potential investors or donors. By tapping into this wealth of knowledge and expertise, you can give your campaign the best chance of success.
The bottom line is that if you are a woman who owns a business, there’s no question that you are part of a growing trend. However, it’s also important to note that these businesses often face unique challenges when accessing capital. Crowdfunding can be a powerful tool. By leveraging the power of the crowd, you can level the playing field regarding access to capital and build your brand simultaneously.
Source: bing.com
