Entrepreneurial Female Business Founders & Investors Offer Strategies for Funding Women-Led Companies

Women need capital to launch and scale high-potential start-up businesses. All too often, there are hurdles standing in the way of getting innovative ideas in front of investors – who are predominantly men – and procuring angel and venture capital financing. During a panel presentation at the Women Who Fund conference on October 8, two female company founders and two female venture capital investors teamed up for an in-depth discussion of the strategies they have used to launch, fund and grow successful women-led business ventures. The inaugural conference was hosted by the Center for Venture Capital and Private Equity Finance and the Zell Lurie Institute at Michigan Ross.

The panel included Beth Paretta, team principal of Grace Autosport, and Kathryn Moos, founder of the nutrition company Vrou, who provided insights from the perspective of a venture founder. Alisyn Malek, investment manager at GM Ventures, and Margot Shapiro, managing director of the business accelerator ChickLabs, shared advice from the investor’s side. Mary Kramer, the publisher of Crain’s Detroit Business, served as moderator for the session.

Here are some of the strategies the panelists recommended for women-led businesses seeking angel funding and venture capital:

Promote Your Idea

Beth Paretta: “Your idea is sexy. You just have to figure out how it’s sexy. As entrepreneurs, we live and breathe this. This is now our job and livelihood. Be comfortable to talk about your idea, and talk about it everywhere. Talk about it at the dentist’s office, because you never know who your dentist knows. It’s amazing how serendipitous things can be.”

Change Your Mindset

Alisyn Malek: “Realistically, you are offering an opportunity to investors. VCs are climbing over themselves to find the next big thing to invest in, so you are not asking for help. You’re coming to them in a position of power. You’ve got the next big thing. That simple change in perception can do wonders for how you talk about what you’re offering ─ the great opportunity you’re bringing to the table. It also impacts your body language and how you interact with people. Changing your own mindset will go a long way. Talk about your offering as opposed to your asking.”

Learn to Talk Finance

Margot Shapiro: “Women could work on speaking the language of finance better than we do. Men understand that language and speak it all the time. We need to live and breathe our operating plans and manage our P&L. We all do it, but we don’t talk about it. We need to understand lifetime debt, customer acquisition costs, top line and bottom line. You need to know the month, the day and the year you hit break-even. Talk it, know it, do it. It may not be your forte, but get familiar with it. Dig down into the language of finance and exude confidence. Because at the end of the day, what people are investing in is a competent CEO, and this is the language we need to use to reach them.”

Find Sponsors

Kathryn Moos: “In entrepreneurship, you want to find sponsors who will reach out to people in your industry on your behalf and forge connections to capital and other industry executives who can help you find your path.”

Hone Your Pitch

Margot Shapiro: “Confidence is paramount. When you are giving a pitch, you need to practice, practice, practice. Then your body language is more confident, and you know what you’re talking about. When an investor asks a question that wasn’t in your 10 or 12 pitch slides, you click to the additional slides and say, ‘We’ve thought about that and here it is.’ You have to think about everything.”

Use Smart Networking

Kathryn Moos: “Use your alumni network. I went to Brown University, and I am starting to tap into those resources. They are willing to do anything. You need to make connections.”

Alisyn Malek: “Do your homework, so you can make valuable use of your time at an event. Be conversational, because you don’t know who someone may know and introduce you to.  Be sure to follow up. A lot of people may be good at getting a stack of business cards, but maintaining those relationships is something you have to do.”

Beth Paretta: “Figure out quickly whether someone can really lend expertise, money or a shoulder to cry on. Sometimes they can’t offer anything beyond a friendly vote of confidence. Then you need to move on, because it’s very easy to spin your wheels.”

Find the Right Investor

Beth Paretta: “You need to find someone who understands your goal. Think of it as going into battle ─ you want the best person. Don’t be tempted by just the money.”

Alisyn Malek: “Know how much money you need and why ─ and pick your partners wisely. Ask them for references. Your future investors will appreciate that level of savvy.”

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