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Small Business Tips

6 Tips for Women Raising Money

MileIQ Team
Businesswoman working with tablet

You’ve worked hard, built a good reputation, found a niche where you can compete and are ready to take the leap and open your own business. But one thing is standing in your way: Money.

Business financing is one of the biggest obstacles that small business owners face. And although in 2018 a woman-owned business received the world’s largest-ever single funding; Forbes reported in mid-2019 that organizations with female-only founders received just 2 percent of the venture capital funding available. However, times are changing. Women-owned businesses are surging, and there are more small business financing options today than ever before, including:

  • Small business loans designed specifically for female entrepreneurs
  • Women funding women programs
  • Venture capital firms that focus on women-owned businesses
  • Angel investments
  • Crowdfunding
  • Business grants for women

However, these programs are highly competitive. So how can you set yourself up for success in such a crowded field?

The answer: By creating a strategic financial plan, understanding your funding options, making connections, telling your story and identifying the right resources.

Let’s take a look at what that all means and why it’s so important.

Create a plan for your business financing

Before you even begin to look into small business loans and other funding options, you should define your funding strategy and outline the financial needs of your business over the next few years. This way, you can prioritize your needs now and in the future.

By going through the exercise, you not only gain clarity on your own needs and goals, but you can create a document that allows lenders and potential investors to understand why you need funding. Creating a plan helps identify earlier on in the process whether a relationship should be pursued and, ultimately, helps you both make more informed decisions.

Know your funding options

Although small business loans can be a great way to get the funding you need, there are alternatives. Below are just a few options (and facts) to consider as you seek additional financing.  

  • Loans. In general, small business loans, whether a bank or another organization funds them, have to be paid back over a fixed period. In addition:
  • Loan amounts will accrue interest, usually starting on the day of disbursement.
  • Startup business loans can be more challenging to obtain because your company’s profitability isn’t established.
  • Collateral, like your home, may be required to secure the loan.  
  • Friends and family. Your friends and family are in a position to help fund your business; it could be a boon. While this scenario does have several upsides, they’re also not without their risks.
  • Pros:
  • Typically less structured
  • Repayment may be more flexible (and forgiving) than bank loans
  • Can bolster your resolve because those you care about believe in you
  • Cons:
  • It must be appropriately structured for tax purposes. If the IRS sees the loan as a gift, it could have negative tax implications. (Always speak with your accountant or business advisor for assistance in setting up a small business loan from friends and family.)
  • Strained relationships if payments aren’t made as promised.
  • Unwanted advice from lenders, friends and family who feel some level of ownership if boundaries aren’t set.
  • Additional stress because you don’t want to let down those you know
  • Venture capital. Using an equity-based partnership where the venture capitalist receives a percentage of the company in return for their investment, you can not only get the small business financing you need, but you can find a true partner to help you grow. However, when considering VC funding, it’s worth noting that:
  • The process is selective because it means a commitment to being bought or going public
  • You’ll be working with the organization as a partner, so you’ll probably have less freedom to make decisions

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Make connections

Having the support of your friends and family is essential. But you’re going to have to meet others outside of your current circle. So, to that end, it’s important that you:

Find a mentor

Not only challenge you and help you grow, but they can help champion your ideas to others, including any financing partners or significant community members.

When choosing a mentor, keep in mind that they should have experience with starting a business, understand your industry and have the time and ability to advise you along the way.


By going to professional functions in your community, you can build your network, get to know people who might use your services or refer others to you, and meet people who might be interested in what you’re doing.

When building your network, be sure to find ways to stay connected. By sending updates, making appearances at events, and staying in touch with them via social media, newsletters or other means, you can build relationships with people who may be able to help if, or when, you need financing.

Apply to incubators

A business incubator is an organization that helps speed up the growth and success of startups by assisting business owners to forge connections with angel investors, state governments, economic-development coalitions and other investors. And, depending on the organization, they may even provide you with a physical office space.

If an incubator accepts you, you’ll have the opportunity to meet other entrepreneurs and connect with people who are experts at helping companies like yours get small business loans, grants and other business financings.

Create a pitch

Before you ask for a small business loan, VC funding or any form of business financing, you’ll need to create a pitch that allows you to explain who you are, where you’re going and what you need. In general, your pitch should:

  • Tell a compelling story by including information on how you started, where you are currently and where you’re going.
  • Be strategic and show how you plan to reach your goals.
  • Be flexible. As you receive feedback or your business or goals change, your pitch should change too.
  • Be used for investment meetings, including those with friends and family, and any time you’re recruiting talent. You can even pare back your pitch and use any appropriate parts when pursuing clients.
  • Be succinct. Your pitch should be thorough without overwhelming your audience. Include an executive summary so your reader can see the highlights at a glance, then move on as needed.

Along with creating an actual pitch document, don’t forget to work on perfecting your “elevator pitch.” Being able to explain the problem you solve, the solution you provide and the people you do it for can help you build valuable skills and connections.

Identify resources

Even before you’re ready to apply for a small business loan or seek other business financing opportunities, you should create a list of financing prospects. That way, should the day ever come that you’re ready for financing, you’re prepared.

When developing your list, be sure to rank your prospects based on standards that are important to you or your business. The criteria may include:

  • Industry
  • Location
  • Funding capabilities
  • Personality/attitude
  • Track record

Like your pitch document, your list of funding prospects should be a living document that’s updated regularly as you meet people and as relationships change.

It’s no secret that raising money can be one of the most challenging aspects of starting a business. But if you invest in building relationships, prepare your pitch, can answer the tough questions, are persistent and willing to explore non-traditional funding options, you can get the small business financing you need to not only survive but thrive.

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