Fundraising While Female

Fundraising and getting initial startup capital is one of, if not the greatest, challenges faced by those starting their own business. And while fundraising obstacles exist for all industries and all founders, one growing subset of business owners is still seeing increased difficulty securing capital: women.

But is there really an inherent bias against women founders? And are things getting better, or is this funding inequality here to stay?

Jennifer Beall Saxton, Founder and CEO of baby gear cleaning and repair franchise Tot Squad, saw challenges as a female entrepreneur almost from day one.

“In business school, I submitted my concept for Tot Squad in the Kellogg Cup business plan competition and classmates made fun of my ‘cute baby idea.’ I went on to win first prize and then a few years later was asked to join the Goldman Sachs 10,000 Small Businesses program, which goes to show that at the end of the day, successful startups are still about providing solutions to everyday problems,” Saxton said.

Despite her success at those early stages, Saxton says she still deals with people who underestimate her based on her “friendly and bubbly” personality.

Fundraising has never been a clearly sexist process for Nvoicepay CEO and Founder Karla Friede, but the leader of her own payment automation software company says there are built-in biases at play that definitely add to the challenge of funding a startup.

“Since I've never been in the shoes of a man when raising funds, it's hard to be absolute,” said Friede. “But people find it more comfortable and easier to work with other people who look and speak like them.  It's a short cut for creating trust, and we don't have to work as hard to communicate or understand one another.  With only 7 percent of venture capital partners being women, there is a natural ingrained bias when choosing who to invest in.”

However, Friede also sees things changing for the better in her industry, led in part by successful women like herself who have blazed the trail.

“The landscape of VC funding is changing. There are more VC firms targeting women-lead technology companies and quite a bit about the topic has been in the media this last year,” Friede said. “More examples of successful, women-led tech companies are driving home the value for venture firms. Nothing speaks louder than successful outcomes.”

Saxton agrees, and even says that nowadays, being a woman can be an advantage when it comes to standing out in a crowded Venture Capital landscape.

“I think the landscape has improved,” said Saxton. “There is a proven track record of successful female startup founders and CEOs today. I have a bigger network of women to call upon for advice and connections.  Sometimes being a female founder can help your business stand out, in a good way.”

The fight for equal pay and equal opportunity is still ongoing and far from fair for female workers in the U.S. and abroad. And while these attitudes do seem to have an effect on women entrepreneurs and their quest to obtain startup capital, female business leaders following in the footsteps of women-built companies like Tot Squad and Nvoicepay may find a more hospitable landscape than those who came before them.