A new generation of women entrepreneurs is tapping into the equity markets, including venture capital and private investment, according to a recent study by the National Foundation for Women Business Owners.
However, women-owned enterprises represent only 9 percent of all institutional investment deals and receive slightly more than 2 percent of all institutional investment dollars.
“The movement of women-owned firms into the equity capital markets is a new phenomenon,” says Nina McLemore, NFWBO chair and president of Regent Capital, an equity investment firm. “Two-thirds of the women interviewed with equity capital received their first equity investment in the past four years.”
A primary factor to success in the equity capital arena is gaining access to the right network of business advisers, including accountants, attorneys and fellow business owners who can assist in putting together the business plan and making referrals.
Other keys to success include:
Giving up management control. Nearly three-quarters of women who have equity capital were prepared to give up day-to-day control of their businesses.
Having a strong management team. The management experience of the company leaders and an understanding of the market are factors that are considered by investors.
Demonstrating market knowledge. Presentations should feature a clear business concept with a realistic marketing plan.
Being persistent. Women entrepreneurs who have equity financing contacted an average of more than 15 funding entities before finding success. Those still looking for financing have contacted fewer than 11, according to the report. >For more information on the report “Women Entrepreneurs in the Equity Capital Markets: The New Frontier,” visit www.nfwbo.org.