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Financing your business with venture capital when you’re a woman.
Financing your business with venture capital isn’t a widespread solution among female entrepreneurs. According to Female Funders, only 10% of all venture capital money invested in 2018 went to companies founded by women.
Caroline Pelletier is vice-president (VP) selection at Anges Québec, a network of private investors who finance innovative, high-potential companies. She is a venture capital specialist. Here’s her advice when considering this type of financing.
Tip 1: Nobody gets the short end of the stick
Investors not only give money to entrepreneurs, they also support them. They are generally business people who have had a successful career and now want to help other entrepreneurs. They have experienced the same challenges. So they’re in a position to share their experience, expertise and address books.
Investors are partners who are there to help. The entrepreneur chooses his or her investors, just as the investor chooses the company. The relationship has to be a win-win situation, otherwise the very reason for the relationship – to grow the business – will fail.
Tip 2: Talk about it and ask yourself questions
It’s important to talk about it. Find people who have either received venture capital or financed businesses. Ask them about their experiences. Venture capital is not the only way to grow your business. You can also choose to grow your business organically. That’s why it’s interesting to meet people and talk about them: what experience have they had? What’s it like to have a relationship with an investor?
At the end of the day, ask yourself what’s right for you. Having investors creates extra pressure; they’re new people to be accountable to. Ask yourself if this is what you want.
Tip 3: Big decisions are made together
With investors, the entrepreneur is no longer the sole decision-maker. The big decisions are made together. An investor won’t manage the business on a day-to-day basis, but make sure you share the same vision for the company.
Don’t forget that capital can take the company further, but so can human contribution.
Tip 4: Not every business needs venture capital funding
Angels are usually the first investors, after family members, friends and the entrepreneur herself/himself. Some industries, such as technology, require a great deal of research and development, and therefore a large amount of capital. This makes venture capital almost an obligation. For other companies, it’s a matter of choice. A service company, for example, could usually be financed in a more traditional way.
-> If you have any questions about venture capital, don’t hesitate to contact Caroline Pelletier.
