Raising Capital

If Startup Funding is so Plentiful, Why Are Many Women Entrepreneurs Still Struggling?

Jenny Kassan | June 30, 2015


Women entrepreneurs, do any of the following comments sound familiar?

“I’m having lots of conversations and none of them are going anywhere.”
“I had an investor commit but now he won’t answer my phone calls.”
“I got sexually harassed when I pitched the first time.”
“An investor asked if I was truly committed to the business given my family obligations.”
“I had a couple meetings with funders who really didn’t seem to understand the product, or they wanted the product to be something else.”

If so, you’re not alone. For all the talk that startup funding is plentiful, many entrepreneurs are struggling to find investors. Women, especially, are spinning their wheels in meetings with investors that don’t yield results. This takes time away from running the business, not to mention their other priorities, and can lead to a downward spiral of lost confidence.

But it’s not necessarily about you. In my work with entrepreneurs, I’m seeing the following trends:

1. Yes, it’s getting easier for startups to raise money, but this is only true for a very tiny percentage of startups that fit a very particular profile.

There is more abundant funding than in recent memory for tech start ups with high growth potential. I have met lots of women entrepreneurs whose businesses are not primarily tech-focused, but who are feeling the need to focus on the “tech part” to attract investors. So their dream of making healthy nutrition bars or customized footwear has to take a back seat for them to even get in the door with these investors. This doesn’t lead to good outcomes: either the entrepreneur has to sacrifice her vision to get investment or, more commonly, the investor senses the lack of enthusiasm for the tech part and passes on making an investment.

2. Most professional investors, even those that consider themselves impact investors, are driven by making high financial returns as quickly as possible.

Many women entrepreneurs are strongly committed to fulfilling a mission with their businesses. Almost every woman I talk to cares about more than making as much money as possible in the shortest possible time frame. They are very reluctant to sacrifice their mission in the name of raising funds. This creates a big mismatch between these entrepreneurs and the sources of capital they’re talking to.

Source: Paul Walker, Flickr

3. Mainstream sources of information about raising capital are steering entrepreneurs toward a tiny pool of potential investors that may very well not be a good fit—which leads to a huge amount of wasted time, money, and energy.

Type “startup funding” into your favorite search engine and I can almost guarantee that everything retrieved takes for granted that the Silicon Valley model is the only model for raising capital. What is the Silicon Valley model? This is the fairy tale story that so rarely happens in real life where a start up raises a seed round, then an angel round, then several rounds from venture capital, and then the company is sold and everyone makes millions. Because of the articles and blog posts that make it sound like this is THE way to raise money, tons of entrepreneurs try to march down this path without realizing that this model fits for only a tiny percentage of businesses. I also hear from lots of entrepreneurs who tell me that their lawyers and advisors discourage them from trying more creative capital raising strategies.

How to counter these trends? Here are some solutions:

Broaden your definition of potential investors

Your potential investors could include your customers, suppliers, neighbors, members of organizations that are in alignment with your company’s goals, etc. In my experience, non-professional investors are satisfied with more reasonable terms and are less likely to demand control. Identify investors that love what you are doing, totally get it, and want to be a part of it. You will have a much more pleasant relationship with them than you would with a professional investor that only cares about maximizing financial returns at any cost.

Consider hiring expertise instead of thinking you need it from your investors

A lot of women I talk to, when I ask them what they are looking for in an investor, say they want an investor who not only has money to invest but also has industry expertise, is willing to serve as a mentor, and has a huge rolodex of useful contacts. Trying to find all these qualities in a single person is a recipe for frustration. Why not consider raising money from investors and then using that money to hire consultants to help with the other stuff?

Create a blueprint and follow it faithfully  

Jenny Kassan
Jenny Kassan

When I work with entrepreneurs that are looking to raise capital, the often want to jump in headfirst and talk to every investor they can get an appointment with. I recommend taking some time to create a plan first. The few weeks it takes to do that could save you months or years of frustration! I help my clients create a plan that includes

1. Getting clear on why you are raising money
2. Your non-negotiable goals and values
3. How much to raise
4. Who is your ideal investor, where are they, and what are they looking for
5. Addressing the mindset issues that get in your way so you can approach investors with confidence
6. Create financial projections that help you see clearly the best way to bring on investors
7. What to offer investors – equity versus debt; exits; etc.
8. What legal compliance strategy to use to make sure you can reach your ideal investors without breaking the law
9. Designing your communication strategy

Once you feel good about your plan, stick to it!  Don’t listen to those who will tell you that you’re not doing it right. I promise you, many of those who “do it right” end up very unhappy, stressed out, and sometimes even fired from their own company.

Get support!

I am working with groups of women entrepreneurs that are all raising money at the same time and I’m amazed to see how helpful it is to be a part of a supportive group. The participants give feedback, resources, introductions, and pep talks to each other, which leads to better results and makes a process that can be very unpleasant actually enjoyable!

If you’d like to talk about your capital raising strategy, click here to apply to have a one-on-one conversation with me.

Related Story: Women Are Making Strides With Equity Crowdfunding

All stories on Women & Entrepreneurship

Jenny Kassan offers legal advising, consulting, and coaching to help entrepreneurs and the organizations that serve them design and implement mission-aligned growth and financing strategies. She has almost two decades of experience as an attorney and advisor for mission-driven enterprises.  She has helped her clients raise millions of dollars and raised several hundred thousand for her own business.


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  1. Great article Jenny! There’s so much that goes into this, especially when it comes to finding the RIGHT investor. So informative!

  2. Great Article Jenny. Thank you for some good advice. Especially customer funded growth. I agree and I am focused on that path, parallel to be introduced to women or women focused investors. All the best, Cynthia

  3. The fact of the matter is, “many women Entrepreneurs are NOT struggling”.

    There is a larger percentage of women getting funded than men who apply and it’s not close.

    CEO SPACE has generated very sizable funding results for large numbers of venture expansions for many nations nearly 30 years consistently. Billions have been successfully raised over the years from investors relating to worthy projects. Growing numbers of venture private equity and related capital sources are discovering CEO SPACE as a risk reducer, a market of superior deal flow quality, and a far lower footprint for time and cost to do diligence. Many now send their rejections to CEO SPACE to ramp up for later qualification to the same venture host. About a third of the members are intentional investors some larger with very substantial resources – while another third including professionals seeking on going education credits attend to grow their business with clients and customers but discover the opportunities are sufficiently rich they also invest in projects along their journey.

    The article is an opinion, it is not fact based research.

    Dave Phillipson, Executive Director, Global Development
    CEO Space – “The Entrepreneur’s Best Friend!”™
    The World’s Largest, Oldest & Most
    Successful Organization for CEOs,
    Entrepreneurs & Visionary Investors

    P.S. Those that know me, understand that there’s not much that excites me more than helping a fellow entrepreneur grow their business! I am passionate about sharing my resources, knowledge, and elite connections in order to build businesses cooperatively.

  4. Jenny, thank you for this wonderful perspective as a woman entrepreneur and a consultant to women entrepreneurs. So many of your examples are true for myself and my business partner – to the point we have flat heads from all the “patting on the head”. Women@Austin is a group in Austin, TX looking to triple the investment in women-owned businesses in Austin by 2017 so there are glimmers of hope out there. Thank you for all you do for women business owners.

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