Happy National Women in Small Business Month!

We have partnered with the local Illinois District SBA to hold a free workshop at Free Range Office on Thursday October 13 from 1pm-3pm. Dollars and Sense: Accessing Capital for Your Business, is free with registration. We invite you to come and get your funding questions answered!

Free Range is a woman owned and operated startup, which is why we love that October is National Women in Small Business Month. Part of our mission is to advance other local women in business and women business owners by providing work space and beneficial services (like the free SBA workshop on October 13th). According to the National Association of Women Business Owners, “More than 9.4 million firms are owned by women, employing nearly 7.9 million people, and generating $1.5 trillion in sales as of 2015.” While this is an amazing achievement, there are areas in business where women still have to break through the glass ceiling.

When it comes to small business owners’ finding funding, there is a gender disparity for women lurking in the mainstream options: venture capital firms, angel investors, or simply going into a bank for a loan. These formalized establishments have a long history of being run by men and unevenly distributing funding in favor of men. Carla Harris, Presidentially-appointed Chair of the National Women's Business Council, suggests, “We believe part of the reason more women aren't receiving venture capital is the lack of diversity at the top in these firms.”

Starting a business is not easy, and the difficulty women have finding funding through standard channels is a substantial barrier to entry into capital-forward industries. According to The United State of Women, the recent Summit developed by the White House, to give you perspective, “There has been a 67% increase in black women-owned businesses, but black women still receive less than 1% of venture funding in America today.” This has funneled women business owners into traditionally less cash intensive (read: feminine) businesses like retail, day care, home cleaning services, etc. While these businesses are needed and bring many women success, what about those of us wanting to move into tech software, financial services, or healthcare device technology (to name a few)? So what’s a girl to do…. literally?

Did you know that women are more successful at online crowdfunding than men? In a study done in 2015 by researchers from UC Berkeley and Northwestern University, they concluded “online environments may mitigate interactional gender categorization because the mediated (virtual) environment allows participants independence from their physical persona and can downplay the prominence of gender as a salient social category.” In standard vernacular - online crowdfunding helps neutralize gender stereotypes found in the more traditional, face-to-face funding institutions, benefiting women! Crowdfunding is extremely successful in cross-industry business applications - meaning women aren’t pigeon-holed into any industry. Crowdfunding equally funds women owned businesses in the arts, sciences, entertainment, etc. - not just tech.

I would like to suggest that women are more successful crowdfunding because they not only articulate their business’ value and quality of product, but can also make a highly personal connection when expressing their story and purpose to a community. This is inherently connected to emotional intelligence. Trust is a key characteristic to emotional intelligence. Through their storytelling (versus the traditional “elevator pitch”), women are able to candidly communicate their business journey, making people feel like they are not just giving away money, but are actually partaking in this venture alongside the founder. The results of that buy-in are new additions to their customer tribe, and (even better) real, monetary investment.

Want to learn about all your funding options? Come to the free workshop at Free Range, presented by our local Illinois District SBA.