Every year less than 3% of VC funding goes to women? To help start bridging that gap, HERdacity hosted “Funding Your Startup: A Mentor Session” with Amy Looper, Co-Founder of OneSeventeen Media, Silva Gentvech, Co-Found of reset, Andrea Kalmans, Principal at Lontra Ventures, Michael Gnagy, Co-Founder of The Ordering.app, and Kristin Spindler, Director of IncubatorCTX.
Where do you start looking for funding?
If you’re looking for a small amount of money ($100,000 or less): “The best scenario [you] can have is to start your company with non-diluted funding,” according to Andrea Kalmans.
Bootstrapping is where most people start, using their own resources to find funding.
A good source is family and friends. That’s where Silva Gentvech and Michael Gnagy started. After bootstrapping for several months, Silva crowdfunded with family and friends for two months to raise the money she was looking for.
If you can, Michael suggests, “Save it. Do it yourself and take that risk. Then you don’t have shareholders and you’re only accountable for yourself.” But be prepared for it to be a lot of hard work. Raising that money on your own can mean a lot more work and hours put in to get your business started.
Another important thing to remember: Don’t forget a contract. When finding funding from family and friends, it can be easy to forget about legal details, but don’t just handshake and hope for the best. Put everything into writing and make sure all parties know what the terms are for the funding. This ensures that
Angel Investors and Venture Capital
An Angel Investor is, according to Investopedia, “an individual who seeks to invest at the early stages of start-up.”
Venture Capital, on the other hand, is “financing that investors provide to start-up companies and small-businesses that are believed that have long-term growth.” Both of these options include
After bootstrapping, market testing, and developing a marketing plan, the next step is finding an investor to help you build traction and launch your product.
“You would look silly if you haven’t done your homework before,” Andrea says. You need to make sure you have a business model and numbers behind what you’re doing. Kristin Spindler suggests going through the Due Diligence Checklist and ensuring you’re on the right track. Even if you’re not quite ready for venture capital, it’s a great way to make sure your start-up is successful.
“If you had one piece of advice, what would it be?”
Silva: “Entrepreneurs and startups here are really collaborative with each other. When you’re looking at a problem or looking at fundraising, find people who are in your industry and talk to them and build those relationships.”
Michael: “If you’re starting a company…invest early on in paperwork. Especially when it comes to hiring [or fundraising]. Everything has to have a contract.”
Andrea: “Now that you’ve heard it from a person who’s done it, for everyone in the room [now you know].”
Amy: “There’s a lot of advice to share and just know that you are going to make some mistakes and I’ve really been talking a lot about accelerators today…Make sure you find the right fit…They will bring the people with the knowledge and the contracts. That’s part of their job is to not let you fail.”
At the end of the day, finding funding for your startup is a big process. From the early stages of bootstrapping to angel investors and venture capital, you should ensure your start-up has a solid foundation to get yourself off the ground. You can find more information on the types of funding at Cloudways.
If you’re a HERdacity member, stay tuned for the video recap of the event, where you can watch our panel of experts discuss their advice in-depth and share their resources on finding funding on demand.
For more information on entrepreneurship you can check out our on-demand webinars “The Corporate Path vs. Solopreneur” by Suzanne Brown and “Building Confidence as a Female Entrepreneur” by Jen Shultz.
Also be sure to check out our upcoming events!