Advice for women entrepreneurs seeking funding for their media startups

by Margaret Looney
Oct 30, 2018 in Media Sustainability

If you're a female entrepreneur with the idea of the century, but you're having trouble finding the money to get your project off the ground, join the club. 

Women-founded companies receive less than five percent of early-stage money from angel investors or venture capitalist funds. 

"That's a ratio that kills innovation," said Deborah Jackson, founder and CEO of Plum Alley, which helps women raise money through crowdfunding and move them up the capital chain. "It kills the ability for women to actually have thriving companies. It means women don't have a seat at the table." 

Jackson joined other venture capitalists (VC), angel investors and funders at IWMF's Women Digital News Entrepreneurs Summit held last week in New York, to speak on how women can have greater access in the media funding arena. IWMF addressed the funding problem with a two-part panel, first with a focus on seed funding and secondly on venture capital funding. 

Here's a roundup of their advice, aimed toward women, but applicable to all entrepreneurs from different backgrounds:

Make sure you're searching for funding at the right level.

Christie George, director of angel investing network New Media Ventures, suggests searching for funding in a layered way: start with a fellowship to build community around your idea, crowdfund to test your audience, apply to an accelerator to build your business model, and then turn to an angel investor or VC fund. 

Crowdfunding gives you a chance to organize your ideas and receive feedback from the public. Starting with a fellowship or grant can help you start building out your project and gain some notoriety. Earning the "stamp of approval" from foundations can help you get noticed when you're approaching larger VC funds or investors, said Marie Gilot, program officer at the Knight Foundation, which features the Prototype Fund and Enterprise Fund

When you reach the accelerator level, you'll receive a small amount of seed funding, usually US$25,000 or less, and dedicate a set amount of time working with mentors that will help you build out your idea and business model. Here you'll focus on making your minimum viable product (MVP), "what is it you're actually offering, what's the value of what you're offering and how you're going to find your target customer," Jackson explains. Once you have that figured out, then you'll be in a position to approach angel investors or larger venture capital funds. 

And when you're making your way through the process, be loud. "The more noise you can create in each ecosystem around your product from all of these different sources, the higher the likelihood you'll get the right kind of money at the time that you need it," George said. 

Team up

"Team is the single most important factor we look at when we're financing startups, because we presume that people are going to pivot their product after we invest," George said. "If people don't have a team that's going to be able to weather those kinds of challenges, it's a red flag for us, regardless of what the team looks like."

The four personalities that should make up a team include a hacker, hustler (business person), designer and a storyteller, said Jake Shapiro, founder of accelerator program Matter based in San Francisco. "It's not that it necessarily has to be four people, but those four skill sets have to be represented and it's quite rare to find one person that has them all," he said.

Generally Shapiro said Matter doesn't accept people that aren't part of a team, but two solo female founders were accepted in the current class of Matter applicants; they proved completely capable of assembling their own team and pulling in resources.

Channel your inner journalist when you're ready to pitch

People with a journalism or storytelling background have a huge advantage with this aspect of the funding process, George said. "The thing that you have is being able to communicate your passion and vision in a way that's actually better than other people trying to start companies." 

"When you think about a pitch, so much of it is a story and [finding] that emotional connection," said Fran Hauser, a venture capital investor and partner with Rothenberg Ventures. When planning your pitch, Stacy Donohue, investment partner at Omidyar Network, said there are five points to hit: What's the problem you're trying to solve, why are you better equipped to solve it than anybody else, who else out there is trying to solve it, how much money do you need to solve the problem...and what are you going to use the money for, specifically. 

In addition to storytelling skills, a journalist's research skills can also offer a leg up on the competition. "Whenever I hear pitches from reporters turned [entrepreneurs], they know the market, they know the landscape, they've done the research," said Natalia Oberti Noguera, founder and CEO of the Pipeline Fellowship, an angel investing bootcamp for women. This research enables founders to differentiate their product from other people's similar ideas and add value to the "white space," she said.

Build relationships.

Donohue said that women building relationships with other women can help to address some of the systematic challenges that female founders face, namely that funders fund people who look like them and people that are already proven entrepreneurs. "Women right now are potentially disadvantaged because...they're not already part of the network they need to get funding and many of them are first-time entrepreneurs," she said. With the VC industry saturated with white men, the cycle sees white men funding other white men who have already received funding in the past. 

"If you want to raise money, it's really about relationships and about you getting to meet people, whether they're angel investors or venture capitalists," Oberti Noguera said. These relationships foster not only venture capital, but also "human capital and social capital, the skillsets that [VCs and angel investors] can provide, and the network that they can leverage." 

Image of panel on venture capital funding courtesy of IWMF. From left to right: Adaora Udoji, Fran Hauser, Harlan Mandel, Natalia Oberti Noguera, Stacy Donohue