CHAPTER 6•FINANCIAL KNOWLEDGE AND BUSINESS SAVVY 133
What Can Women Do to Clear the
Financing Hurdles?
To Overcome Any Shortfalls in Initial Funding
Build Personal Reserves
The earliest investments will be your own and those of your
cofounders. The more cash that you can set aside for the early-stage
development of the business, the stronger the position you will have
when you seek outside investors. Use the time before you start up the
business to cultivate your network of business and professional con-
tacts who can assist in the start-up and development of the business—
either directly as partners, investors, clients, or customers, or indirectly
as references and conduits to other interested partners.
Consider Founding with a Partner or a Small Team
Most complex businesses are created by small teams of entrepre-
neurs rather than by individuals. Consider your goals and your capabil-
ities, then organize a founding team with multiple talents and resources
and draw on the shared pool of nancial resources to get the business
off to a ying start.
TABLE 6.2 Sources of Equity Investments
Sources of Equity
Private investors—individuals or groups 93%
Bank where you had debt 8%
Venture capital rms 50%
From pension funds/insurance companies 5%
Publicly issued stock 5%
Investment from a small business investment corporation 8%
134 CLEARING THE HURDLES: WOMEN BUILDING HIGH-GROWTH BUSINESSES
Creatively Finance the Business to Show Proof of Concept and
Capability for Growth
Women must raise their initial capital creatively, including using
bootstrapping techniques. Bootstrapping by minimizing capital
requirements can enable the team to demonstrate product viability,
build market interest, and prove management capability. That level of
success already achieved is the proof that enables women to take the
next step and engage debt and equity investors. The Springboard sur-
vey results provide a good comparison of women who were successful
in securing outside equity investments and those who were not. What
the winners had in common was their ability to bootstrap the early
stages of growth. The personal savings of the start-up team funded
90% of their ventures in the early stages. The next most popular strat-
egy was delaying compensation for the founding team to help build the
business (73%).
However, there were distinct strategies that differentiated those
ventures that succeeded in getting equity investments from those that
are still trying. Among these are bootstrapping options that use “other
people’s money” (i.e., customers, vendors, and employees) and control
resources the business doesn’t own (e.g., leasing equipment). Boot-
strapping was critical for positioning the businesses for subsequent
investment by external investors; a well-disciplined nancing strategy
increases the chances of the rm’s later success and increases the ven-
ture’s access to outside investors. Women-led businesses that use boot-
strapping as part of their nancing strategy are more likely to be
successful in securing equity nancing. These women have been able
to demonstrate the success potential of their businesses while develop-
ing greater skills as leaders.
If women have not had the opportunity to learn how to plan and
execute bootstrap nancing through rsthand industry and start-up
experience, attending programs to learn about these options is advis-
able. Leading a fast-growth business is challenging. Bootstrap nanc-
ing is essential to getting off to a good start.

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