10 Proven Ideas Women Entrepreneurs Can Use to Fund Their Businesses

Women-owned businesses are growing, and owning your own business is empowering and challenging. What holds many women back from putting an idea into practice is a lack of capital. However, there are a number of ways you can acquire the funds you need.

1. Bootstrapping
Bootstrapping means you use your existing finances to fund your business. Some entrepreneurs manage to save enough to fund a business. A survey of women small business owners (650 of them) in a State of Female Entrepreneurship study found that over 60% chose to self-fund their startups.

Using your own finances means you must be able to stick to a budget and be aware of every dollar spent and the return on investments. It may take a while to develop a steady cash flow and get back the money you've spent.

2. Family funding
The next step, if you don't have the funds yourself, is to approach family or friends. They know you well and are more likely to offer support than strangers if they believe you have a worthwhile idea or product.

They may give you a donation or offer you a loan that you can pay back as your business starts to prosper. Mothers are able to enjoy the perks of working from home by starting up their own home businesses using loans from families.

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3. Business Grants
Grants are a very popular way to self-fund. If you apply for and receive a grant, you put the funding towards your business without any obligation to repay it. Grant applications usually come with a list of requirements that you must follow to apply and become a recipient.

The InnovateHER Challenge is an annual grant from the U.S. Small Business Administration. It provides an opportunity for entrepreneurs to showcase products and services that have a measurable impact on the lives of women and families, fill a need in the marketplace and have the potential for commercialization.

The Cartier Women's Initiative is one of the largest grants for women, but the competition is tough. Women in the initial states of business development in any industry, in any country, and of any nationality can apply.

The Girlboss Foundation funds female entrepreneurs in the fields of fashion, art, music, and design.

Grants for Women offers a comprehensive list of business grants available to female entrepreneurs who are proven to be under-supported in business.

4. Crowdfunding
Today more women are running campaigns to fund their startups on crowdfunding platforms. There are some crowdfunding platforms specifically for women entrepreneurs, such as iFundWomen, that provides access to capital through crowdfunding and grants, expert startup coaching, as well as useful connections to assist you throughout your startup journey.

If you want people to believe in your idea or product and support it, the look of your crowdfunding page, how you tell your story and continual communication on your page is essential.

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5. Angel investors
An angel investor is a high net worth individual or group of accredited investors. They give you money in return for equity in your company.

An example of an angel investors club that focuses on female-founded companies is Golden Seeds. They have a screening process that involves going to the website and uploading information. If you're accepted, you have to go in and present to a group of investors.

Before approaching angel investors, you need to have compelling information in place, such as a prototype of a product and a business model. They want to invest in a company that will grow and be very profitable so they can get the return they're looking for from the money they put in.

6. Accelerators and incubators
Accelerators take small equity amounts in return for small amounts of capital as well as mentorship. The program usually runs for three to four months, after which the startup “graduates.” A mentor or business coach can be invaluable when starting out.

Incubators are sponsored by private companies, educational institutions, or even governments. They offer working space, funding options and support for startups in the initial stages. They bring in an external team to manage your idea and take a larger amount of equity because they allow more time for a business to be successful.

7. Pitch competitions
Many competitions are held for entrepreneurs to showcase their ideas or products. An ingenious or viable idea or product may win a cash prize to be used for starting a business.

The co-founders of Mighty Well, Emily Levy and Maria del Mar Gomez, built and launched a medical accessory company from their dorm room. They needed more capital to build a product line of their wellness accessories and began entering pitch competitions and winning. They generated enough cash to support the research and development of new products.

8. Loans from micro-financers and financial companies
Before you apply for a loan, you need to consider where to apply, how much to borrow, interest rates, and repayment terms. Micro-financers and non-banking financial companies may offer loans without needing collateral. They also usually provide quick approvals and disbursements.

9. Loans from banks
If you have a good business model and the potential to pay back a loan, banks will give you financial assistance. There are various types of loans and you have to pay interest on a loan every month.

10. Venture capital
This is the type of funding you seek once your business is already established and you need to scale. Venture capitalists will invest in a business in exchange for equity and help a business to expand and grow, even if there is risk involved.

Inc.'s Fundery is a searchable venture capital database for women. You can find out who is looking to invest in female CEOs and diverse founding teams, in funding stages, geographical areas and specific industries.

Venture capital is finally becoming more diverse and female entrepreneurs need to take advantage of this. For example, female cloud professionals are scarce, although spending on cloud tech is exploding. Perhaps this is an opportunity the women entrepreneurs need to consider.

A final word
Every day new organizations are springing up to increase female access to opportunities. There are various means for women entrepreneurs to secure funds and each one has its advantages and disadvantages. Depending on your particular startup, you need to evaluate which option is best for you and go for it.

Joseph McLean is an experienced project manager and freelance writer. His main focus is professional improvement and self-development. The favorite topics of his posts are education, motivation, and self-growth. Please, do not hesitate to contact him on Facebook.

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