Small Business Capital. How To Evaluate Funding For Female Entrepreneurs and Small Business Owners

Female startup funding: How to raise startup capital for your small business? Grants, bootstrapping, venture-backed, loans and the list goes on!

If you’re an entrepreneur, you’ve probably heard one or more of these terms, or have considered leveraging one of these ways to fund your business.

I know I have.

I have an education technology (EdTech) startup that I founded in 2021. Entering the tech space seemed to be the best way to scale after publishing a book in 2019 for college-bound students going on campus visits. Seeing as how today’s teens (and every teen thereafter) are digital natives – 95% have access to a smartphone (Pew Research Center, Teens, Social Media and Technology 2022), it seemed like a natural step. The elephant in the room was the question of how I intended to fund the business and required technology.


The following are some of the most common options suggested to founders for funding their business.

Bootstrapping: Self-funded startup

Bootstrapping means using your own money. This includes reinvesting profits back into the business or using your personal savings or credit cards to finance your startup.

Pros of bootstrapping your small business
  • Gives you focus. Saves time, energy and distractions of trying to impress investors
  • Quicker Decisions. You can make decisions more quickly without needing to consider your investors
  • You retain ownership. You won’t dilute your share in the company
Cons of bootstrapping your small business
  • Time. It takes longer to get results when you lack the resources and capital you need
  • Lack of support. Having a formal investor can mean strategic support and new connections for your small business
  • Personal Risk. The job security you leave to start your company and the personal funds you invest are risks you will be taking.
Small business startup loans for women

You can get a loan from a friend or family member or a financial institution, such as:

“Two out of every ten businesses are owned by women. However, despite employing over 10.1 million people and generating $1.8 trillion in revenue annually, women are hitting a wall when it comes to financing.” – Funding Circle

There are many reasons why women have trouble getting loans, so make sure your paperwork is in order, you work on your cash flow and credit score, plus be willing to get creative and be persistent!

Crowdfunding for raising startup capital

Raising small increments of money from lots of people within your personal and professional network. Can be rewards-based or equity-based.

Examples of Crowdfunding sites:
  • iFundWomen is a rewards-based donation marketplace for women-owned businesses and the people who want to support them with access to capital, coaching, and connections.
  • Kickstarter is a rewards-based donation platform. You set a monetary goal and the amount of time you want to reach it, and tell your campaign’s story. You then share your project with the community in hopes of finding backers.
  • GoFundMe is a donation-based crowdfunding company. Good option for nonprofit organizations and businesses that have service-based initiatives.
  • LendingClub is a debt-based crowdfunding site. It offers up to $40,000 in personal loans and up to $500,000 in small business financing. Each loan term is three or five years. To qualify, your company needs to have been in operation for at least a year, the applicant must own at least 20% of the business, and it must have an annual sales revenue of $50,000.
  • Indiegogo is a reward-based platform that offers two kinds of funding. Fixed funding allows you to set a goal for a certain amount of money, and if you don’t reach your target, all funds are returned to donors. Flexible funding is when you’re looking for any amount of monetary support, all of which you can keep whether you hit your goal or not.

Source: Simone Johnson – Business News Daily

Venture capital for women

A form of private equity and for businesses that are believed to have long-term growth potential. In exchange for funding, equity (ownership of your company) is offered to investors. Investors also expect a multiple (3x, 5x, 10x) in return for their original investment.

Sadly, we’ve all heard the abysmal stats around women raising venture capital.

“Female founders secured only 2% of venture capital in the U.S. in 2021, the smallest share since 2016 and a sign that efforts to diversify the famously male-dominated industry are struggling.” -Bloomberg

The VC pitch process is failing female entrepreneurs. It’s not only the hard data (financials, product or service quality, the size of the market opportunity) that affect investors’ decisions, but also the quality of the interaction between an entrepreneur and an investor that is driving the disparity. Psychological factors, preconceptions, assumptions and values all drive implicit bias in the outcomes.

VC funding for women

Yet there is still hope, Companies with female leaders outperform those dominated by men, data shows and there has been a rise in the number of female-forward VC companies in recent years. Here is a robust list of venture funds for women and as a female founder, there are many different things you can still do to maximize your funding potential.

Angel Investors for early-stage startup

Individuals who invest in startups or early-stage companies in exchange for an equity ownership interest

  • They provide funding for startups.
  • It’s a good option if your company doesn’t have enough cash flow or business credit to take out loans.
  • They are less risky than traditional investors.
  • The debt is not expected to be paid back in case of failure.
  • They will provide plenty of helpful information and expertise.
  • There are flexible terms within the agreement since they are investing their own money when compared to larger venture capital firms that invest other people’s or corporate money.
  • They offer connections through a wide network that can help your business.
  • They will usually request equity in your company.
  • The investors will have a say in the direction your company takes.

Source: Truic

Accelerators for female founders

Accelerators are intense and fast-paced, taking 3-6 months to get an early-stage startup ready for market with access to mentors and experts. Equity is typically exchanged for program placement.

“Being part of a female-only accelerator gives founders access to female mentors – women who have been there, done that, and raised the funds” – Atto

Here is a list of accelerators that help female founders make progress.


Money awarded to businesses. Unlike loans, grants don’t have to be repaid. The money is not being borrowed. There is no interest attached. There are an increasing number of grants specifically targeting female business owners.


With so many options, it can be overwhelming. There are so many questions to ask yourself before deciding the best funding option(s) for you, as some have more long-term strings attached than others. Here are a few things to consider:

  1. How much equity/ownership are you realistically willing to give up to investors?
  2. Is the end goal to run your business forever, or position yourself for a buy-out or merger?
  3. Are you confident in your ability to generate enough revenue and profit to pay off loans and credit cards?

In my case, I used profits from my book sales and consulting income (bootstrapping) to get started. I saved a lot of money upfront by using a great no-code tool to build my minimum viable product (MVP) and even got some paying customers from it!

From there, I assessed further needs and decided to crowdfund for $15K to hire a developer.

Not all crowdfunding platforms are created equally, so be sure to research them thoroughly. For example, I used iFundWomen, which is rewards-based crowdfunding. In exchange for a contribution, donors receive something in return. I offered executive coaching sessions, website audits, college admissions application review, and a shirt to name a few. You’re encouraged to create rewards that your network needs and will want to use. Contributions were deposited in real time and available for me to access throughout the campaign.

Other crowdfunding platforms offer donors equity, early product access, or nothing at all. Some platforms even withhold contributions until the stated fundraising goal is met – all or nothing!

Overall, there are plenty of ways to fund a business and there may be multiple funding options that work for you. Assess your business needs, goals and risk tolerance to find your funding. Happy growing!

Small business Funding Resources:


About Danielle Marshall

Danielle Marashall is a Member at The Lola and the Founder of Tour Genius, the Notes app for college campus visits. Ask the right questions and find your fit!

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