For anyone launching a company, the first fundraising round can be one of the most challenging times of their life. Capital-raising can be a bit of an art, a science, and a dance requiring both a positive attitude and an incredible amount of perseverance. For women founders, the process can be even more daunting and uncertain. As of 2015, only 26 percent of angel investors and 4 percent of venture investors were women.
Because there are also fewer women founders, they sometimes need to prove themselves more than their male counterparts do. The good news is that the number of women entrepreneurs is increasing, and the number of female investors is also on the rise. Women with a sharp pitch deck, strong revenue projections, and numbers to back up an awesome product or service are poised to be excellent fundraisers. Here are four best practices I’ve learned as both a female entrepreneur raising capital and as an investor in early-stage businesses.
DO YOUR HOMEWORK
Spend serious time on both your business plan and staking out your potential investors. Know your audience: who is this potential investor, which similar businesses have they invested in, and why are you a great fit for their portfolio? Investors want to see that you are creating value and that you know your numbers. Have a simple yet well-designed pitch deck — no more than eight pages — with good financial projections and data to show why you believe the targets are realistic and attainable for you and your team.
There are really good reasons to invest in women. I have found that female entrepreneurs make realistic projections, are more likely to meet their milestones, and are often more frank when mistakes happen. Moreover, First Round Capital has found that female-founded startups outperform startups that have all-male teams. So make your ask with confidence. Own how great your business plan is, and know inside and out what social or environmental problems your business addresses and how well you and your team are positioned to harness market forces to solve them. Think of it this way: as an entrepreneur you have a great service or product to offer the world, and by inviting an investor in you are allowing him or her to be a part of the change you are working hard to create. Remember that you are also making a contribution and an offering by inviting the investor’s participation and partnership in this shared mission.
This means being your true, authentic self. Investors are looking for execution skills, so tell them real stories about what life events led you to start this business and how your unique talents and skills have allowed you to meet or surpass projections thus far. Investors also want transparency about past failures because they want to see how you confronted and overcame those challenges and how you put yourself on the road to success. Tell stories about milestones you are proud of that may also illustrate how you have confronted roadblocks, and share how as a result you are ready to tackle any issues that come your way.
PATIENCE IS YOUR FRIEND
Know that fundraising generally takes a lot of time, and that building relationships is part of the process. Women tend to have high emotional intelligence, which can be incredibly useful in building relationships with investors. To the extent that you can, be empathetic — i.e., step into the shoes of the investor to guess what is most important to him or her. It will serve you well in connecting your proposal to their interests.
Also keep in mind that there are difficult funding cycles: both summer and the holidays are times in which investors can be elusive. Don’t be discouraged if potential investors are not getting right back to you. As you grow relationships, do ping potential investors with friendly updates, keeping them apprised of your milestones. Many will be watching your progress and may eventually want to invest in you.
Remember: the right investors are those who believe in you as an entrepreneur, are fully aligned with your mission, and also bring more than money. They might have great connections to other investors, solid legal advice, tech support, new customer pipelines, etc. Ideally you will collect a basket of patient and supportive investors who believe in you, are willing to introduce you to other potential investors, and may be willing to roll up their sleeves here and there to advance your progress. And until you get there, repeat after me: I’ve got this.
Kristin Hull, Ph.D., is co-founder of Impact Hub Oakland, North Oakland Community Charter School, and Nia Global Solutions. She is a partner and portfolio manager at Green Alpha Advisors, a solutions-focused public equities firm.
A version of this article originally appeared on B the Change. Green Alpha Advisors is part of the community of Certified B Corporations. Read more stories of people using business as a force for good in B the Change, or sign up to receive the B the Change Weekly newsletter for more stories like the one above, delivered straight to your inbox.