For My Sisters In Business - A Guide To Funding and Investment for Early Stage Start-Ups and Scale-Ups For Women

I recently read a post on LinkedIn recently, highlighting (again) the issues for women in attaining funding in the UK and worldwide.

We need to throw a light on this subject and it is our responsibility as women in business to help one another to aid others who may not have the knowledge or networks that we already have.

One of the personal missions that I have is to freely give away knowledge to help and support as much as I can.

At the age of 52 with over 32 years in business worldwide as a Director in engineering and technology and as a founder and investor, I hope that the following information will help with the reality of business; (and what you can expect) plus, what you need to do in terms of ‘working the system’ to your advantage in the early years (as a woman) to avoid abject financial failure of the very worst kind in business.

Please get in touch or DM me on LinkedIn if I can be of any assistance or you have any questions after reading this article (AMA). Please note that I receive around 100 pitch decks each day and if you want to speak to me then please book an appointment via my profile, I will not fund cold approaches - thanks!

Read on…

It is a statistical fact that most women’s businesses worldwide lack the operational funding to achieve their goals and aspirations.

Despite data and reporting stating repeatedly that female-founded businesses are more profitable and lucrative or that co-founded female led businesses with men have the most potential to scale.

The stats:

The Rose Review (2019) stated that ￡250bn per annum would be placed into the UK economy if women and minority businesses were correctly funded.

As a note of comparison, the British Royal Family brings the UK economy just ￡2.5bn so you can see the gaping gap here in terms of how lucrative this could be.

So why aren’t women being funded?

Many women seem mystified that the systems that have been set up by men favour the funding of men.

Historically and sociologically wealth distribution is limited to a small percentage of people and this (in the UK) is reinforced by an outdated class system that dates back to before the time of the British Empire.

Women have more caring and social responsibilities in families (generally) much smaller pension pots and more generally after the age of 40 we just disappear from the radar!

But another important point in the UK is as follows - in the UK we are also used to getting everything for free. Education is free (at least the earlier parts), and Healthcare and the NHS is free. We are blessed (and we don’t even know it), and there’s an assumption often that funding your business should also be free and business support should be free.

But just because something IS free, it doesn’t mean it is any good, please bear this in mind. Your time is your most precious commodity. Also, a sense of entitlement around not having to work for something is often the biggest barrier that people face in the mindset adjustment of entrepreneurship.

Life expectancy and time:

Most women will live to the age of 80.1 years.

Take that in again.

What age are you now?

How long have you got left?

Should you now waste 2 hours each week at the supermarket shopping when online you can do this in 20 minutes (you get my drift).

We are successful where we apportion our time and attention, so you do need to bear this in mind when you start a business, do you have the time and courage to commit to it? If so, then here’s some information that may shock or perhaps even surprise you.?

Funding for women’s businesses:

On the funding side, the public sector is responsible for most business support in the UK.

This is devolved through Government agencies and partners.

The natural order of things (and because it is the public purse!) is that the systems are highly structured and overly onerous and mainly exist to advertise UK plc and protect the public purse (which is understandable if you are using taxpayers money) rather than service the needs of true innovation that perhaps we would see in the systems in the USA (for example) where more risk is taken and often at an earlier stage.

So what’s the barrier?

Well how long have you got?

Unconscious bias is a big issue in all the systems currently as we can see from the data and statistics. Virtue signalling is all well and good, but quite frankly boys, just show me the money (as Jerry Maguire once said).

Unfortunately for women trying to navigate this already complex system, to which they have never been exposed and feel locked out of (it may as well be written in another language!) then we have to try and see if we can

a) understand the system, enter it and be part of it OR

b) design our own systems of funding one another OR

c) use workarounds.

Sadly as less than 3% of angel and venture funding goes to women worldwide, we have to use the two options listed above (B and C).

It simply makes no sense for us to continually try and pitch to people that have no intention of supporting or funding us and our time and efforts can be better spent in other areas. Like creating an alternative system of funding and support. This is what we are creating at StartUp Disruptors with an inclusive founder to founder led community with a 50/50 split to help women connect with one another and male allies that will advocate for us too (we need them!).

What I do wish to share, as both a founder and an investor, is the following information that will be useful for anyone who doesn’t fit the mould when it comes to funding.

(Please note that over 97% of people reading this will never get funded by Angels or Venture capital, so some of the alternatives below need consideration) please don’t waste your time, effort and money on chasing this unless you already have significant funding and support/networks behind you.

These are the kindest words that you will ever read as 80% of SMEs fail in the first 5 years and 97% fail within 10 years in the UK (source Small Business Britain).

This is a stark warning that you have to devote the whole of your life, funding, time, and effort into starting and scaling up a business. Yes it is fashionable right now and many education providers sell programmes off the back of the entrepreneurial dream, but the reality is long hours, mental health issues and burnout. Success is only seen in the very few that make it despite the odds.

So, here are my top tips for anyone reading this on how to make money and get funding for your business.

1.????? Understand ‘your ask’ and where you ‘fit’ – are you really a scale-up business, is it a hobby or a lifestyle business?

Understand that the answer to this one question alone saves months of time. There is no shame in any of these answers and this is not meant to throw shade at people’s choices of business or making money, but you need to know where you fit and then how you raise for that option.

Angels are unlikely to fund solo founders and if it’s a hobby, then sorry, it is not a business. It’s a bit of extra cash like MLM. Know the difference!

2.????? Get customers – it’s old-fashioned but businesses need customers. Don’t spend hours planning perfection that’s just procrastinating.

Get an idea then immediately ask as many people as you can for money for the ‘thing’ either product or service.

The tech snobs out there will say ‘well I have to code an MVP for this’ er no, you don’t. If a customer doesn’t understand what you are trying to sell them and they won’t buy it, then move on.

There are thousands of iterations in tech and it’s an expensive game so customer feedback all along the process is critical. Get it in month one of your idea, then work to scale it.

3.????? Make the most of free resources – most founders spend hours gazing at laptops, waste time at ‘business support’ workshops and downloading cheat sheets.

This is the wrong approach. In the early days, the best resources are people. Understanding how the market operates and the best currency is knowledge.

Put in the hours of getting to know the market and do the research. The reason for so much failure is that people skip this phase.

This can take 12-60 months depending on the complexity of the market that you are operating in.

This applies for any business, tech or lifestyle.

Points 1 and 2 here will save you thousands in lost hours and money in going to the market too early or borrowing money that you can’t afford and don’t need.

4.????? Use a Business School at a University – if you are in the UK you may not know that University Business Schools have a raft of free resources (remember Point 2?) by resources we mean knowledge as a founder you need people more intelligent than you, to do the things that you are no good at.

You cannot do it all, so get over yourself.

Ego-based founders fail fast, run out of money and spend a lot of time talking and not doing. Be a doer and crack on love!

5.????? Sell stuff at home – if you want the most simple lesson in entrepreneurship then here it is.

This will tell you if you like entrepreneurship and if you will be any good at it. Take one item from home and sell it for a profit.

It can be a board game, or unwanted clothing in the UK there is over ￡2000 worth of stuff in your garage, loft, or living room that can be sold for immediate profit. Use this to seed fund your business.

Test the ideas, and speak to customers. You will be amazed how you can make this money stretch. Don’t forget to use the free student and Business School resources such as student projects to help with your eventual business model and scaling up. Most people fail in business, because they want to get rich quickly, if this is you (yes you!) then you are in the wrong game.

My favourite phrase is ‘entrepreneurship is more Del Boy Trotter than Steve Jobs). Again for 97% of you out there, you may end up with a nice business that suits your lifestyle, and there is nothing wrong with this, but please don’t be disillusioned that the climb is glamourous or comfortable for anyone.

It isn’t.

6.????? If you have the appetite and funds from home and can learn how to trade on a basic level using Facebook Marketplace, Vinted etc then you probably have the appetite to do more.

I was trading from age 8 when I won raffles at school and sold the goods for pocket money or donated them to charity, there will be signs at a young age if you are naturally ‘into’ the way of life of a business owner as you progress.

7.????? Other sources of money – friends, family and fools. The trifecta!

Your family and friends will often be the last to invest or buy from you.

Read this again. THE LAST.

What you need are what we call ‘believers' or what we call in business ‘early adopters’. These are people that see value in what you are doing, will adopt and advocate it and then help to raise your brand profile by talking about it and introducing you to others. They won’t be the people that will stay with you for years, but they will help you to start up.

8.????? Grants – you can find grants listed on the internet and via Google.

Don’t waste time and money in the early years on endless applications for ￡500 it is not worth it. Go out and find how to sell something to a customer for ￡500 instead and see if what you are doing works. Then find more people like that first person to sell to. Where are they, work out where they hang out and go and speak to them.

9.????? Skills swap – swapping skills is critical although the tax man isn’t keen in the UK so make sure that it is all legally tabulated.

If you’re good at design, but rubbish at selling, then seek out the ‘go to’ person in your local area and do some design work in exchange for some sales training and then act on it and practice.

Sales is the only skill you need when you start and scale-up. So get good at it and comfortable with it. Revisit Point 4 if you don’t have confidence, you need to show up with people and be able to communicate the offering of what you are selling from a vase on Facebook to a tech start-up selling you, your product and service is key.

10.? What are people buying – they are buying you.

Sorry tech founders. If someone doesn’t like you they will never fund you.

That’s because there really is never a NEW product or service. What investors look at is the emotional intelligence and capacity of the founders and founding team, their combined skills and EQ to see a project through. You can have the most rubbish pitch deck and still get funding (I have seen it happen!) and this is because the person ‘doing the thing’ is clearly in for the long haul and can complete and finish tasks and there is evidence of this.

11.? Crowdfunding – for women this is a very real alternative in order to fund. BUT you need some money to ideally pay professionals and agencies that have a good track record of funding projects (as them how much as an agency they have raised). Don’t set it up alone, again find someone that has successfully done it and ask them for help! Again knowledge is the currency we use alongside money in business.

12.? Savings – this is obvious but if you aren’t willing to use your own money and take a bit of a risk first, then why should an Angel take flight with you at all?

Don’t forget these are people that have been through all of the above steps and worked hard to get where they are. It is their money and time and not yours to complain about ‘not getting it’.

Generally, people that we can hear complaining about things won’t get invested.

This is key to EQ of founders, my tip is to avoid people who are negative thinkers and time vacuums at all costs.

They will cost you in the long run; often more than you will ever know.

13.? Partnership/Co-Founder – think about it. The power of two or a team is always going to win. In business, we work in teams for protection and advancement. This has been the same since the dawn of time and community and more brains in the room or on the issue is always the thing that works. Failure happens in business, as many founders are not open enough to be re-directed or don’t take action on seasoned advice.

This type of failure is often more stark than funding failure. This is why in tech we see so much failure in pretty much every series of funding.

14.? Sweat Equity – this is underestimated as a means to an end for female and minority founders.

Please use this option more as you can build out an effective team by giving away equity (but using the correct legal and share structures – please take advice, again universities often have FREE legal clinics where you can get advice please also ensure that you get the right tax advice from an accountant that can and is fit to advice on this also).

This means skills and knowledge in exchange for time and knowledge. It is likely you will need to cover off the following team functions as you grow – sales, compliance, finance, grant and bid writing and funding and much more (you can see where I am going with this!) do the research!

15.? Mentors and coaches – good mentors and coaches from day one are the thing that founders most need.

Find founders that have successfully scaled up in your market or sector and ask for help and advice.

People are fundamentally good and will help you if they can. Don’t become obsessed with going to networking events that are not relevant to the people that you want to connect with, most events are a waste of time unless you have researched and are sure that the type of people you want to connect with are attending.

Do the work!

16.? Funding events – attend in the audience and see how they work. It is likely that you will not pitch at this type of event and if you do, you will more than likely be around 10 years or so into your business journey or have significant funding and connections already.

In the UK, this is typically through Government innovation agencies or networks like universities (back to the UK class system!).

A lot of these events are just theatre. Please remember that Dragon’s Den is not real life; it is a TV programme as is The Apprentice. Most of the successful entrepreneurs that make it are normally on their 3rd or 4th attempt at starting a business, having made all the mistakes!

17.? Female funds – there are dedicated female funds all over the UK and globally and these are growing, so please seek them out. We work with a number of venture capital and angel networks you can find them via our website on the Sponsor Us page.

I hope that you have found this information useful.

Please add your own thoughts in comments below.

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