On October 21, The Company Lab (CO.LAB) partnered with the JumpFund and EnrichHER to host the first ever Will This Float?: Female Founders Edition, a local business pitch competition designed to support up-and-coming ideas and companies. Will This Float? kicked off Chattanooga’s Startup Week and invited everyone in our community to show their support. I had the opportunity to work closely with the eight amazing female founders who were faced with the challenge of presenting their company in four minutes or less.
A wide variety of companies and industries were represented— from laundry services to horse accommodations to grandma’s chocolate sauce to recycling in rural areas. Every founder came with her unique story and pitch to the judges. It was inspiring to hear how each company began and to see how each woman stepped up to the challenge of sharing their business to a crowd of energetic supporters.
I get the opportunity to talk daily with entrepreneurs of all kinds, but there’s something special about early stage companies as they are bright-eyed and passionate to embark on their dream of starting their own company. These eight women came with an enthusiasm that was contagious. One business shared their vision publicly for the first time, one had her app approved in the app store just that morning, and one is bringing a cafe to a food desert in her local neighborhood with a boldness that is inspiring others to come alongside her. As I’ve reflected on the evening, what stood out to me the most was seeing these women overcome a fear of public speaking and allow themselves to be vulnerable by sharing their purpose with a larger audience.
I came away seeing strength in each of them as they built their presentations, perfected their timing, and cast their company’s vision over the crowd. During the conversations I had with them beforehand, we talked through topics ranging from what it was like to build a company as a mom, how to clarify what their mission was, and what it might take to access capital for growth.
Speaking of capital, which is one of my favorite topics (#KivaKatie), understanding how much funding is needed to start, sustain, and grow a business is a challenge. Globally, female-founded companies receive less than 10% of all venture capital funding. However, research shows that female-led companies typically outperform male-led companies, which is why it was exciting to partner with two incredible organizations that have made it their mission to support women entrepreneurs through access to financial capital and connections to valuable networks— the JumpFund and EnrichHER.
The JumpFund is a venture fund that invests in women-founded and women-led early stage companies throughout the Southeast. They have invested over $5 million in women-led ventures to date. One of those ventures is EnrichHER, which addresses the disparity of female-founded companies receiving less venture capital funding with a lending platform that connects revenue generating, women-led businesses with affordable capital and invaluable networks.
As a female founder seeking to raise capital, you could consider the following 4 stages:
- Bootstrapping is building your company from the ground up with nothing but personal savings and, with luck, the cash coming in from your first sales (which could include entering pitch competitions like Will This Float? where you can win cash prizes!). You typically remain in full ownership of your company in a ‘bootstrapping’ stage.
- Crowdfunding is using small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding could also be considered a friends and family stage. Depending on the type of crowdfunding platform you use, that will impact if you are giving away pieces of your company or taking on debt— like through Kiva. Kiva is a 0% interest crowdfunding loan platform offering loans up to $10,000 that provides early stage companies opportunity for initial startup capital.
- Utilizing a funding platform like EnrichHER can broaden your opportunities with a business loan or innovative revenue share options. Companies applying for EnrichHER funding should have at least $50,000 in revenue, been in business for over 12 months, and a credit score of 600. This platform provides a community of support that is quite unique as you are building your company and raising capital.
- Venture capital investment, like the JumpFund, is a form of private equity where an investor provides finances to a startup or small business that is believed to have long-term growth potential. While most people assume that venture capital is the quickest option in starting a company, the percentage of venture capital for companies that are founded solely by women is 2.3% (2018). That’s one of the reasons why the JumpFund was started, to provide more access to that type of venture capital to women-led companies across the Southeast.
But raising capital wasn’t necessarily on the forefront of each of our eight female entrepreneurs who pitched that night during Will This Float?. While I’m sure they were thinking of the cash prizes, I believe they each stepped onto that stage with courage and excitement to share with the world their story, and in turn invite each of us to journey alongside with them. And I, for one, cannot wait to see what’s in store for all of them!
About the Author
Katie Hendrix is a Programs and Capital Access Manager at The Company Lab, CO.LAB, in Chattanooga, TN. Katie manages CO.LAB’s Capital Network, connecting local entrepreneurs to various sources of capital ranging from crowdfunding platforms, like Kiva, to venture funds.