Over the past 3 years, I’ve written in Forbes about the troubling disparities that exist for women entrepreneurs. Companies that have women on their founding team, for example, achieve higher returns on equity than companies that don’t, yet women entrepreneurs are far less likely to seek outside financing and those that do are less likely to get it.
For every three men raising equity financing to start and scale their businesses, there’s only one woman, according to an analysis of the Inc. 500 | 5000 by the Kauffman Foundation, which researches and advocates for entrepreneurship. And women-owned businesses achieve $1 million in sales at one-third the rate of businesses owned by men, according The 2014 State of Women-Owned Business, a report commissioned by American Express OPEN.
Title II of the JOBS Act, which took effect in September of 2013, had the potential to change all that by allowing entrepreneurs to advertise that they are looking for investors via crowdfunding platforms. But more than a year later, the percent of women raising money publicly is only 17% of all companies, according to Crowdnetic, which maintains an equity crowdfunding database.
That change is too small and too slow. I wrote the book Forget the Glass Ceiling: Build Your Business WIthout One to inspire more women to create and build their own mega firms. I’m now embarking on another research project, THE VENTURE CROWD: Everything Ventured, Everything Gained, aimed at educating both sides of the financing equation, women entrepreneurs and investors, about this relatively new financing and investment option available to them — equity crowdfunding. THE VENTURE CROWD will help fund actionable tools, including a guidebook and training that will show both entrepreneurs and investors how to take advantage of equity crowdfunding.
To provide this education for free,THE VENTURE CROWD will itself be funded out of Plum Alley, a reward-based crowdfunding platform. Yup,I’m walking the walk and talking the challenge myself, crowdfunding the project: I want to experience first hand what it’s like to undertake a crowdfunding project. While what you get in exchange for your money is different in equity crowdfunding versus reward (shares in a company versus a tangible item or service, respectively) the marketing tactics are similar.
I’m turning to the people who will benefit from my research: entrepreneurs and investors. Such collaboration is the keystone for both crowdfunding and entrepreneurial success. My crowdfunding goal is to raise at least $7,500 with additional funding provided by Dell and Ellenoff Grossman & Schole, a leading law firm specializing in alternative financing. The more money we raise the more training we can do.
Your participation in this crowdfunding effort will enable Ventureneer to share critical information that can help women entrepreneurs achieve more robust performance as well as those who benefit from their success. You will be joining our media partners Business Women Experts, Enterprising Women, Small Business Trends, The Next Women and Women 2.0, as well as supporting organizations such as Astia, Ellevate, Inforum Center for Leadership, the National Association of Women Business Owners, National Women’s Business Council, Springboard Enterprises and the Women Presidents’ Organizations.
In recognition that these companies have the potential to go public, NASDAQ lit its tower in Times Square with my ambition to ignite interest in equity crowdfunding among women. During just the first few days of the pre-rollout of the campaign, I’ve raised 15% of my goal.
The crowdfunding campaign will run through February 6, 2015 on Plum Alley. I’m asking you to contribute early because campaigns that demonstrate traction from the get-go are more likely to succeed. I’m also asking that you share this with others you know who care about the progress of women. In March, we’ll release a definitive report that provides a blueprint for entrepreneurs and investors on the who, what when, where and why of publicly raise equity funding.