Fintech 2016: Global Invest Her teaches women entrepreneurs to play the funding game

By:
Peter Lee
Published on:

As evidence emerges that start-ups led by women make more money for venture capitalists than those led by men, a new platform aims to help women entrepreneurs get funded.

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The fintech revolution, by which entrepreneurs using breakthrough technology seek to transform traditional financial services as provided today by incumbent banks using end-of-life IT platforms, is itself a living example of the process of mobilizing finance.

Fintech start-ups are often bootstrapped by founders’ private savings, later funded by angel investors if the underlying business concept is proved, then built through rounds of venture-capital investment as the business scales up and ultimately IPOs as a profit-making established, sustainable business.

A lot of founders’ time is devoted to raising money, when it could be better spent on developing the core technology, building the business, winning over staff and customers. And, while many fintech entrepreneurs talk about democratizing finance, opening it up to the unbanked and promoting inclusion, that fund-raising process is not an easy or familiar one.

The case can be made that half the population of potential entrepreneurs start off with an immediate disadvantage.

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Anne Ravanona

"The statistics suggest that perhaps as few as 20% of business angels are women and only 6% of the partners of venture-capital firms are women and that less than 5% of venture-capital money invested goes to women-led companies," says Anne Ravanona a business consultant who is founder and CEO of Global Invest Her, a platform designed to help women entrepreneurs become investor-ready to raise finance.

"There are no statistics on the women-led companies that try and fail to raise money, but the number of women entrepreneurs stands at around 10 million in the US and 11 million in Europe."

Ravanona adds: "It is harder for women to raise finance. And our aim has been to explain and de-mystify the funding journey, partly by interviewing women entrepreneurs who have successfully raised money, partly by asking venture capitalists and angel investors how they like to be approached, what they look for before investing, and ultimately by setting up a system for successful entrepreneurs and business leaders to mentor women seeking to raise funding."

The portal operates a subscription revenue model and Global Invest Her runs events as well as webinars and a private-funding forum to connect women entrepreneurs and potential backers.

Ravanona isn't shy about generalizing over differences between how men and women think. "Women tend to be more relational than men. They tend to build lots of relationships on their funding journey, meeting lots of people for 500 cups of coffee, many of whom turn out not to be helpful at all. Perhaps because of that and the way they network, the whole process often takes longer than women entrepreneurs expect and they are more likely to get discouraged.

"Men have different networks and ask for the information and contacts they need quicker. In addition, women have a tendency to ask for less money than they should during early rounds of investment."

Understanding the rules

Ravanona thinks that the answer is not so much changing the rules of the fund-raising game as helping entrepreneurs understand them in the first place. 

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Fourteen fintech firms in focus

Capital markets
Origin
Zeroflows 
Huddlestock 
SyndicateRoom

Peer-to-peer, marketplace lending
LendInvest
Landbay
Finpoint
OnDeck

Blockchain and cryptocurrencies
Applied Blockchain
Safello
Wirex

Financial inclusion
Global Invest Her
EdAid

Payments
MangoPay

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"Women, just like their male counterparts, are likely to face the same 10-minute pitch to venture capitalist panels, most of whom are likely to be men. The 10-minute pitch works better for men than for women, so they need to be prepared to be judged and to deal with that different way of thinking, knowing that the men judging their business may problem-solve and make decisions in different ways and have their own blind-spots."

How does this work? Ravanona says: "If I ask you a question, as a man you’ll probably give me a straight answer from A to B. Women tend to think more broadly and add more details from A to D, and sometimes men can read that as being off point."

True to her business-consultant roots, Ravanona and John Fayad are launching a training series (beginning with a webinar) with practical do’s and don’ts to help women "own the moment" when pitching to male investors.