At some point in the life of your business, especially if your vision of success includes hiring employees, creating wealth, and offering innovative products or services, you will need to consider stepping into the world of “other people’s money.”

The challenge of choosing the funding to grow your business

If yours is a woman-owned business, accessing capital comes with challenges. According to a 2014 report commissioned by the Small Business Administration,  on average, women start their businesses with half as much capital as their male counterparts. And as their businesses grow, the gap widens. While the vast majority of business owners rely on personal assets to fund their business start-up, undercapitalizing your business can significantly impact its ability to survive and grow.

Funding stories from 5 women business owners

At the spring 2016 Women Business Owners Network conference, we sat down with five women business owners to hear their experiences and recommendations about finding money for their businesses.

  • ·      Kelly Klein is the owner and CEO of the Vermont Craft Mead family which includes Groennfell Meadery, Havoc Mead, and the new Scandinavian-inspired restaurant, Colchester’s Mead Hall. Her business has gone through several stages of growth since its inception. To fund start-up and growth, Kelly has drawn on direct investment, a line of credit, and most recently a loan through Community Capital of Vermont.
  • ·      Shirley Richardson, of Vermont Chevon, has used a variety of funding opportunities to bring her idea to the marketplace, including accessing  economic development programs like The Working Lands Enterprise Initiative, other grants to support agriculture, and exploring local equity based crowdfunding possibilities opened up by the Vermont Small Business Offering exemption.
  • ·      Pam Cowan, in various projects during 9 years with Telequity, has participated in raising capital from various Vermont sources – both equity and debt.
  • ·      Sarah-Lee Terrat & Anne Lika’s company, Fuzzu Toys, used a successful Kickstarter campaign to launch their first product line, Presidential Parody Pet Toys.

Their top recommendations for accessing capital:

1.     Don’t stop before you start. Many women business owners disqualify themselves from accessing capital by determining in advance that there are no options that fit their specific needs. And while finding the right match takes work, there are options that fit your needs– from business loans, to Kickstarter campaigns, to equity funding. Accessing funding is a natural part of business growth, not an indication that your business is “failing.” In fact, successfully accessing capital increases your odds for business success.

2.     Do explore capital before you are in a desperate place — it helps to build your funding experience over time. Most business owners will tell you that it is much harder to get a loan when you “really need it.” And, under the best of circumstances, it can take longer than you think to secure the right funding package for your business. Successfully managing funding concerns early in your business’ life cycle positions you to access larger resources as your business grows. Along the way, you develop helpful relationships and invaluable wisdom.

3.     Be sure your plan matches your goals for your business and your life. Whatever choices you make about funding impact both your business and your personal situation. Choosing to not seek capital for your business will serve to keep your business small and slow its growth — which can be exactly the right choice, if that size and rate of growth matches your personal desires. It is worth at least considering the different growth possibilities and impacts before you choose. You are the person who determines what success looks like for you.

4.     Be prepared. Before seeking funding, it is vital that you have your business financials in order, you understand what they mean, and you can describe how the funding will impact your business. That means you need to create a compelling business plan or pitch. Different funding sources have different requirements. Create your plan in the format desired by your potential funder.

5.     Crowdfunding (Kickstarter, Indiegogo, Plum Alley) can be a great way to raise capital for your business. And a recent study shows that women “out perform men, and are more likely to succeed at a crowdfunding campaign” (Greenberg & Mollick, 2014). Don’t fool yourself, though. Take it from those who have run successful campaigns:  it is a lot of work, and you really need to work it to get a good result.

6.     Grants are a possibility, especially in agricultural/working lands/farm-to-table products, high potential technology, child-care businesses, and the arts. If you are very active on social media platforms, there are also social media competition awards offered by large companies (like AMEX Small Business, Chase, Eileen Fisher, Tory Burch).

7.     Mind your equity. Related to #3, in some funding vehicles (partnership, equity funding, venture capital), you exchange some of your ownership in, and therefore control of, the business to the funder who provides cash and assumes some risk. Understand the equity impact of the choices you make.

8.     Get help, but don’t relinquish your own knowing and wants. Trusted advisors and mentors can provide incredible value. Someone who has been through the process you are embarking on, even if their experience is in a different industry, can help you to assess your readiness, weigh your options, and can provide priceless feedback on your idea and presentation.

9.     Build your capacity for risk. The 2016 report A Force to Reckon With: Women, Entrepreneurship and Risk (Beckton & McDonald) found that “women entrepreneurs’ views on decisions related to risk are influenced by their perceived level of confidence.” If you own a business, you already know that risk is unavoidable. But it is manageable. Your confidence increases as you build small wins in all areas of your business, including funding. And there is nothing more fulfilling than seeing your calculated risk become a vibrant, successful business.

For additional suggestions and resources about accessing capital, check out the National Women’s Business Council Access to Capital Toolkit. (

Laura Lind-Blum: Laura is the creative force and Idea Midwife behind the Innovation Wellspring LLC and Cosmos Jewelry, and a board member of WBON. This blog post is adapted from a Money & Your Business column published in BusinessVermont August 13, 2016.