A banker turned crowdfunding executive explains why new financing models are leveling the playing field for female-owned businesses. By Heather Schwarz-Lopes (Co-Founder & CEO, EarlyShares.com)
The crowdfunding space is emerging as a progressive place for women entrepreneurs and business managers alike. Once the SEC finalizes its rules, equity crowdfunding — a subset of crowdfunding that aims to raise funds and invest in businesses through social networks — will allow more people to invest in projects important to them, leveling the fundraising playing field for currently underrepresented entrepreneurs.
Financing for Mom and Pop
Before coming onboard full time as the CEO of EarlyShares.com, I was on a steady road to success in finance and banking. My career gave me the opportunity to network with high-profile clients at the private bank level, which was eye opening. I was able to see up close the difficulties that established companies currently face when they look for capital to expand. This struggle is even clearer when you analyze the state of small business and entrepreneurship in America. I felt like I had to use my expertise to try to help bring a solution to the financial limitations of our mom-and-pop shops across the country, including women-owned businesses.
According to the American Express Open Forum initiative, in 2012 there were an estimated 8.1 million women-owned businesses in America, which generated close to $1.3 trillion in revenues and employed 7.7 million people. As women rise into leadership positions in increasing numbers, social enterprise and corporate responsibility will be an even bigger force for good.
A Fresh Start
In my opinion, the fact that crowdfunding is a new industry that is being shaped right now allows for the industry to steer clear of any deep-rooted biases. Because there are no longstanding precedents in terms of leadership in crowdfunding, we are all, men and women, working together towards the same goal. Nonetheless, I am glad to say that spearheading part of this initiative are several very successful, savvy and talented women. I have not felt any biases within the industry since its inception. This could be due to the close relationship that the pioneers of the crowdfunding industry have maintained since the JOBS Act was signed. This is a close-knit community of like-minded professionals trying to bring knowledge and education to the general public. The crowdfunding space right now has a collaborative atmosphere, were our main concern is getting the rules and regulations going and sharing our expertise to hit the ground running once the industry is live.
Crowdfunding also bypasses the traditional presentation of an idea for financial backing. Crowdfunding allows you to present your idea to millions of people and has the ability to generate an impactful response. Again, due to the fact that it's in its early stages and is a self-managed initiative, it provides the opportunity to own one’s voice without the limitations of gender. Crowdfunding allows women to express their identities and business goals to the world.
Within the crowdfunding space, women who have the passion and drive to be successful can thrive – the industry is all about doing things differently, and ultimately, better.
Women 2.0 readers: Do you think women entrepreneurs will particularly benefit from crowdfunding?
About the guest blogger: Heather is co-founder and CEO of EarlyShares. She brings more than 15 years of management and financial industry experience with an outstanding track record of launching successful businesses of her own and building a entrepreneurial division when she served as senior vice president and private banker at Wells Fargo. Photo credit: Pablo 2008-09 via Flickr.