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March is Women’s History Month, and last year, I shared an article about small business grants available for women entrepreneurs running niche startups. Grants are a fantastic resource for any entrepreneur starting or growing a business, as they provide a specific sum of money to fund your business. And, depending on the grant, other potential incentives include industry-specific supplies and fellowship opportunities. As an added bonus, grants are different from loans in that they do not need to be repaid at a later date, essentially making the grant free money for your business!
Outside of grants, are there any other sources of funding that women entrepreneurs should know about? Yes! There are plenty of additional resources that may assist in getting your business off the ground.
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Below are additional funding resources where women entrepreneurs may find capital:
Venture capital firms
Rising startups (especially those of the unicorn variety) may attract the attention of investment professionals. The two most common types are venture capitalists and angel investors.
Venture capitalists (VCs) are a part of venture capital firms that back high-growth startups with equity funding. Choosing equity funding gives investors a stake in your company. This stake, commonly found in the form of shares or an equity position, is made in lieu of taking out a loan with investors.
However, there is one particular caveat to know before working with a VC firm: your startup may not be considered for funding unless it has proven high growth or unicorn status. Many VC firms will help fund specialized companies, like apps or software, that are growing quickly and have the potential to yield a huge return on investment.
Don’t despair if this doesn’t describe your startup. You have additional options, like…
You may also seek out funding from an angel investor. These individuals may have fairly ordinary professions, such as doctors and lawyers. They see your startup has great potential and choose to invest in it.
An angel investor may invest as much as $25,000 to $100,000 per company. These investments cap off at $100K, unlike the million-dollar investments provided by venture capital firms. Angel investors, much like VC firms, also require equity in the company. You may work out what that specific stake looks like together.
Apply for the SBA’s 8(a) Business Development program
Some women entrepreneurs may find themselves socially and economically disadvantaged. If that’s the case, turn to specific resources, such as the U.S. Small Business Administration’s 8(a) Business Development program, for help.
Disadvantaged small businesses that qualify for the program compete for contract awards available through various socio-economic programs. A Business Opportunity Specialist may also assist in navigating these federal contracts. And, thanks to the SBA’s mentor-protégé program, disadvantaged businesses may also form joint ventures with established businesses.
You can learn more about the 8(a) program and what it takes to qualify by visiting the SBA’s website.
Visit your local Women’s Business Center
Did you know that over 100 Women’s Business Centers are sponsored throughout the U.S. by the SBA?
These centers are developed to assist women entrepreneurs with business development and access to capital to fund their startups. Use the SBA’s search tool to find your nearest Women’s Business Center. Not close to any of these centers? You may also use the same tool to find the nearest Small Business Development Center, which also provides funding assistance to women entrepreneurs.
No matter your business or your situation, there’s a funding resource out there that’s right for you. Start your search for startup capital by exploring the options above.