Women entrepreneurs contribute to the 30% of all the small businesses which is growing day by day. But still women entrepreneurs have to face a lot of problem and hard time trying to raise funding for their venture. However, the lack of funding for women entrepreneurs isn’t because women are not good at business or they are not making an impact on the small business landscape. But the fact is that women entrepreneurs are often turned away by banks for small business loans because of the lack of collateral, strict banking regulations, low or negative cash flow, and revenues, and lack of preparation. In brief, it is due to the risk factor involved to the lenders, women entrepreneurs have to face difficulty in arranging funds for their venture.
However, if you are a women entrepreneur visiting banks again and again getting rejected, looking for an angel investor for your venture is no more required. You can opt for crowdfunding, where you can get funding for your venture easily, without facing any hassle.
What is Crowdfunding?
Crowdfunding is basically a method to set up funds for a venture from a large number of people. In a crowdfunding, the capital is raised through the collective effort of friends, family, customers, and individual investors. Hence, we can say that crowdfunding is a practice to fund a project or a venture by raising money from many people who each contribute a relatively small amount when together combined form a huge amount. This is typically done via the Internet, primarily online via social media and crowdfunding platforms.
Benefits of Crowdfunding
- The fund is collected in pools: small amount of funds from a large number of people.
- Uses the power of the internet to get a large number of people who are ready to give funds.
- Creates equal opportunity both for men and women.
- Funds are given even for start-ups.
- No need of much documentation.
- No guarantor is required.
How Crowdfunding Works?
Choose a Platform
There are many crowdfunding websites available on the internet. The first step starts with- to choose a crowdfunding website. While choosing always look for the platform which is right for you and your project.
Make Your Idea Tempting and Appealing
If you want desirable funds for your new business, grabbing the attention of potential investors is very important. Having a short and appealing sales pitch and some great imagery or video content related to your idea will be a great help in this.
Offer attractive Rewards for Investment
Rewards for investing are always based on how much one chooses to invest in a project or venture. In terms to get large funds, you should offer good rewards, so that more and more investors get attracted towards your venture to invest. You can also offer some equity or profit percentage to your investors.
Set the Level of Investment needed
When you need investment from outside people you should be clear about how much you need exactly. Many of the investors are not ready to invest a small amount while others would not be able to invest more. One more point to consider is, when you are offering some rewards or equity against the investment done, you need to be more careful about calculating the amount you exactly need.
Share Your Project
To make Crowdfunding projects successful, you need to share your project as much as you can. This is suggested because investors are excited about the idea they have contributed to and want to tell others. Hence, make sure they can share it on social media easily.
Why Women Entrepreneurs have great Crowdfunding Success
Most of the women entrepreneurs were not able to make it big, only because of lack of sufficient capital. This was sometimes due to lack of collateral, proper plan or something else; women entrepreneurs find it difficult to get a business loan from banks.
Crowdfunding to be an easy and promising road to grow one’s business/stories were pitching their thoughts and plans is much easier way to more number of people. Crowdfunding has picked up so much energy that it is currently viewed as one of the best funding options to drive ladies forward in their business.
Crowdsourcing has immersed as an efficient platform for the women entrepreneurs. According to the recent report of The National Women’s Business Council – Crowdfunding as a Capital Source for Women Entrepreneurs – in view of restrictive and unique information from the two driving crowdsourcing stages, Kickstarter and Kiva. The objective was to decide different indicators of progress on crowdsourcing stages for ladies entrepreneurs, and if those indicators of accomplishment were not quite the same as their male partners.
Some of the Crowdfunding website for women in India
FuelaDream – FuelADream is a Bengaluru based crowdfunding platform, launched in April 2016 with 14 projects. This crowdfunding platform is a rewards-based and focuses on creative art projects, social causes, and charities.
BitGiving – BitGiving is an online crowdfunding platform. BitGiving helps women entrepreneurs to raise funds for their venture and giving wings to entrepreneurial ideas, creative minds.
Rug Beneath My Feet – It is India’s 1st Women-centric Rewards Crowdfunding platform. The platform helps women entrepreneurs to get funds for their ventures and campaigns.
Impact Guru – Impact Guru is a tech-for-good platform that provides complete crowdfunding solutions to empower individuals, social enterprises and NGO’s to raise funds for medical emergencies, personal needs, and creative projects and even for the social cause whether it is big or small. The aim of Impact Guru is to bring together generosity with the need to maximize people’s potential.
Crowdfunding has proved to be a door-opener for companies that need funding to get off the ground or to expand their product reach. Especially for the women entrepreneurs who were struggling to get funds for their ventures.