Women business owners have been slow to seek out equity investors — those who fund businesses for a share of the company’s ownership.
However, 44 percent of equity investors interviewed in a study conducted by The National Foundation for Women Business Owners earlier this year say they have seen an increase in proposals from women business owners in just the past year.
Although these equity investors are beginning to back businesses owned by women, this funding source remains largely untapped. So where are women business owners turning for equity capital? According to the study:
- 73 percent of women business owners receive initial investments from family members or friends.
- 73 percent have received equity capital from individual angel investors.
- 25 percent have received equity capital from corporate investors.
- 15 percent have received equity capital from venture capital firms.
Additionally, 67 percent of the women investors interviewed say they have invested in women-owned firms in the past three years, compared with only 40 percent of men investors.
The study shows it pays to be persistent. Women entrepreneurs who have equity financing contacted an average of more than 15 funding entities, while women still seeking equity financing have contacted fewer than 11. Source: The National Foundation for Women Business Owners, www.nfwbo.org