Deborah Jackson on how women supporting women can help overcome some of female founders' fundraising challenges.
By Jessica Stillman (Editor, Women 2.0)
It’s no secret that access to capital can be a problem for female-founded firms, with only about 5% of VC money going to women’s startups. Plum Alley thinks it may have found one answer to this stumbling block: helping women support each other’s entrepreneurial ambitions.
Last week the year-old startup that provides a platform to find and purchase products from female-founded firms launched a new crowdfunding feature which allows backers to support products they believe in. For founders, the crowdfunding feature offers “a way to test a product for market acceptance, get publicity and traction” without giving away any equity, Plum Alley founder and CEO Deborah Jackson explained in an email.
Why Women Focused?
Why should founders use a platform tightly focused on women rather a bigger option with a broader user base? "As a woman creator, there are distinct advantages of using our crowdfunding platform over others. Many projects will be created to solve problems and needs that are unique to women. Our audience is comprised of enthused individuals who are not only excited about women entrepreneurship, but can directly relate with many of the causes and projects that will be fundraising on our site," Jackson, who also co-founded women-focused accelerator Women Innovate Mobile, said.
"Further, Plum Alley has an existing e-commerce platform where project creators can subsequently sell any product that rises from crowdfunding and benefit from additional exposure," she added.
Crowdfunding may be a particular good fit for many women, Jackson feels, as they can struggle to find the capital they need to grow their businesses through traditional channels "Women seeking first-year financing receive about 80% less capital than men. In addition, women entrepreneurs receive less than 15% of all early stage capital, even though they represent half of the companies founded." she notes.
Filling that funding hole isn’t just good for women entrepreneurs, it’s also potentially great for the economy: "If women entrepreneurs in the U.S. started with the same capital as male entrepreneurs, they would add 6 million jobs to the economy within five years. This imbalance is more an economic issue that affects everyone, rather than a gender inequality issue."
To pursue that mission of a healthier economy by better supporting female-founded busiensses, Plum Alley has additional offerings for female founders in the works, including a tool to help connect them with expert advice. "Plum Alley is working with another female-founded company to provide a seamless way to connect women innovators and expert advisors. Plum Alley’s panel of experts will be seasoned professionals in various fields, and will be available for hire on a project basis. We plan to launch in beta in the next month," explained Jackson.
If you'd like to apply to be an expert (or if you have a project to submit for crowd funding), more details are available here.
What sort of projects would you like to fund?
Jessica Stillman (@entrylevelrebel) is an editor at Women 2.0 and a freelance writer with interests in unconventional career paths, generational differences, and the future of work. She writes a daily column for Inc.com, contributes regularly to Forbes and has blogged for CBS MoneyWatch, GigaOM and Brazen Careerist, among others.