Influencers assist entrepreneurs get investments
- November 16, 2022
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That the sea is not for fish in the world of venture capital is nothing new. But companies founded by women are struggling even more to get funding, according to the study. The Seed Round in 2021-22: Proving Market Fit and Monetization Amid Uncertainty🇧🇷
Despite earning less money, women-owned companies are more resilient, according to a survey of managers including PitchBook, Beyond the Billion, JP Morgan, Apex and Pivotal Ventures.
The survey shows that companies with female leadership had lower cash burn rates, more early-stage valuation growth and lower late-stage declines compared to male-only companies.
So what can women do to change the picture?
Using your wealth to bridge the gender fundraising gap. This means that female investors can invest in women’s companies in the form of limited partnerships (LPs) in gender-led venture capital funds.
By investing in these venture funds, women can make an impact in line with their values, make the world a better place and close the gap in the marketplace.
From the corporate world to venture capital
Carrie Colbert was an executive at Hilcorp Energy Company, in the oil and gas industry. Despite the company’s success, the sector did not make its eyes shine. So, the businesswoman decided to undertake at the age of 38.
“I started connecting with brands I liked on Instagram,” said Colbert. “It was at the very beginning of the social network where you could grow quickly and I ended up becoming a small influencer”. At the same time, she also started investing in brands founded by women.
Colbert made great returns and ended up being offered more deals than he could invest. That’s when the idea of starting a venture capital fund, the Curate Capitalfocused on accelerating the success of these companies.
“I had the business flow part covered,” she said. “But I had a lot to learn about fundraising and administration.” To fill the gap, the investor went after market specialists.
Colbert had intended to launch Curate Capital in early 2020, but economic uncertainty from the Covid-19 pandemic caused her to delay fundraising by about a year.
In 2021, she started reaching out to her peers – mostly men – in the oil and gas industry. They didn’t understand the value propositions of women-founded businesses, and fundraising stalled.
“I started talking about Curate Capital on Instagram,” said Colbert. Rather than focusing on the problems of finding investors, she focused on the upside. Women performed better. “There is no denying that it is an opportunity.” Taking advantage of the lower valuation, it is possible to obtain a better return than investing in companies founded by men.
Women are more willing to invest in other female entrepreneurs through a venture capital fund. According to How Women (and Men) Invest in Startups, women are astute about risk. Research shows that they are more likely to reduce the risk of their investments by diversifying into funds that invest in multiple companies; investing with long-term thinking and betting on private companies to complement the portfolio.
Colbert wanted to make investing in the venture fund affordable. On average, investors need to write checks for US$ 100,000 to invest in companies, but she had the possibility to stay below that amount in her fund. The survey finds that nearly three-quarters of accredited investors would put their money in startups if the minimum amount were $25,000.
Words matter too
To bridge the knowledge gap, Colbert used accessible language. “Venture capital investing is a black box, a mystery to most women,” she says. “Over 60% of my investors found out about Curate Capital via Instagram,” said Colbert. “I’m super excited about how I’ve been able to reach a new generation of investors.” More than half of its audience is investing in private companies for the first time.
Curate Capital’s goal was to create a $10 million venture fund. She exceeded her initial goal by 50%, raising $15 million to invest in women’s businesses.
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