The number of women-owned businesses is at an incredible all-time high in the U.S. According to statistics, there are 11.6 million firms established by women, employing close to 9 million people and generating $1.7 trillion in sales.
Unfortunately, women aren’t nearly gaining as much funding for their businesses as men. And in the startup world, women founders obtained only 2% of venture capital in 2021. That’s the smallest share since 2016. This means women are forced to look elsewhere for money sources to fund their startups.
With little access to funding, many women feel limited when starting or expanding a business. While there are numerous grants available for women entrepreneurs, they still need some traditional sources of funding that capital investors can provide.
Here are the best ways to attract investors for women-owned FinTech startups.
1. Research Your Investors to Think Like One
When pitching to investors, you must think psychologically to understand what makes them tick. Incentives are the key here, but you want to avoid sticking to only monetary benefits. You’ll need to find out what your investor is passionate about and use that to your advantage.
For instance, you can discuss how your product will benefit others and how it can make a difference in their lives. When you subtly tie in your passions with the investor’s ambitions, they may be more likely to help you secure funds.
Consider researching to learn more about your potential investors. Sift through their profiles on social media and study them.
2. Know Your Numbers
Be prepared to explain your financial statements. Investors care about your revenue model and they want to know there will be a return on their investment. So when you present your financial information, ensure you explain your projected cash flow and understand your operating costs. Be confident and know what it takes to build and maintain your business.
Consider integrating ERP software with your financial reporting to save 80% of your time preparing for your report. An ERP software solution is perfect for laying out your financial data and tracking your deliverables.
3. Focus Heavily on Growth and Risks
Many investors view women entrepreneurs as people who play it on the safe side. However, capital investors don’t want protected options. They want someone who can present options that generate higher returns.
Convince the investors you’re worth it by outlining a clear strategy for growth. Pitch your plan for how you’ll stay afloat during future financial quarters. Plus, you’ll want to demonstrate how you will turn your product into a money-generating machine.
When you showcase strategic decision-making, you’ll be prepared to prove that your startup is a worthy investment.
4. Address Your Market and Marketing Strategy
Addressing your market informs investors about its potential size. They’ll want to know factors that acknowledge customer reach and how long it will take to become a market leader. Knowing your market size will help steer your business in the right direction. However, it also aids in determining your marketing plan.
Understand the market to make predictions about its size, including:
- How many leads you are to expect.
- How long your sales pipeline will last.
- The potential revenue growth in a specified timeframe.
Fluidity is key here because your market, industry, and business will change. So investors will want to know your strategy for how you’ll utilize resources to reach customers and deliver value. Remember, investors want startups to grow quickly and have the ability to manage that growth. So you must have the ability to articulate your plan to achieve it.
5. Present Your Exit Strategy
Build confidence in investors by sharing your complete timeline of the company. Share how your company plans to use the proceeds and what will happen when you reach a certain revenue threshold. You’ll want to be prepared to explain what milestones you aim to achieve and the anticipated results.
Whether you decide to grow into a multi-million-dollar corporation or franchise your business, a clear exit strategy will show investors you’re serious. Most of all, this will show them how you plan to return their investment.
Lock In Your Funding
While women encounter far more obstacles than men when they pitch their ideas, your confidence is key. Try to show your strengths and show them how you will be able to build a successful business. If you can pitch yourself as a venture capitalist, this shows you know the ins and outs of your business. Therefore, you lock in the opportunity to secure better funding for your startup.