This social network has a new fund for women entrepreneurs

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While the United States has about 12.3 million women-owned businesses that generate around $ 1.8 trillion in annual revenues, when it comes to business proposals receiving seed money, the bulk of the funds still go to men. Meanwhile, women entrepreneurs often find themselves left behind and must seek other sources of funding.

AT help bridge this gap, as well as help other groups of all ages, life stages, ethnicities and backgrounds, depending on Peanut, he created Start HERE, a micro-funds to help startups. Peanut, which also operates a social networking app for women, targets entrepreneurs who lack family and friends who can pull out their checkbooks.

“The assumption that founders should have networks capable of investing in their businesses creates an unfair starting line for most groups. If we don’t remove the barriers to that initial funding by providing access to capital, how can we expect to see a new founder’s profile change more through the fundraising funnel? Peanut CEO and investment committee member Michelle Kennedy said in a prepared statement. “Peanut’s StartHER Fund opens the door for founders seeking this early funding. “

StartHER is launching with $ 300,000 and plans to award between three and four investments this year. Peanut will have no stake in the companies in which it invests, according to the company. From goals of StartHER is to find “pre-seed” companies aspiring to have a positive impact on society, health or the environment. Individual grants will vary between $ 25,000 and $ 50,000.

“As a member of Founders Fund, I am delighted to be part of the StartHER investment committee to help these entrepreneurs, who have not been sufficiently recognized, to develop their networks in the venture capital community ”, said Anu Duggal, founding partner of the fund , in a press release.

Currently, women entrepreneurs only receive around 7% of venture capital funding for business ideas, despite the fact that overall, female entrepreneurs are more successful than men, as noted in the book Women entrepreneurs: the secrets of their success. According to Crunchbase, around 17% of venture capital funds have gone to companies with at least one founder who is a woman. For all-female businesses, however, only 2% received funding. For women of color, the statistics are even worse.

The COVID-19 pandemic has also affected women entrepreneurs on several fronts. According to Crunchbase data, between 2019 and 2020, there was a 27% drop in funding for businesses started by women. When schools and daycares closed and education went virtual from 2019, many women had to put their business plans – and businesses – on hold to take care of their families. Eliminating in-person networking opportunities also puts women at a disadvantage.

The reasons why women entrepreneurs receive smaller investment loans and grants than men vary; they often ask for less money because they are more careful when it comes to estimating the value of their business. In some cases, women’s business proposals are less conventional, making traditional investors wary. “Women entrepreneurs often do not reflect the image that funders have of this group of business leaders,” said delivered. “…They (the women) just don’t conform to the standard of the young hooded geek.

Not to mention that most of the people in charge of the dollars in venture capital firms are men; only 13 percent of decision-makers are women. Some women also said they experienced sexism during the application process or said interviewers focused more on their personal lives than their work plans.

But with the post-COVID economy, more and more women are ready to start new businesses. Women-owned businesses are poised to stimulate the economy and can – if only investors would heed this reality.

the Start HERE the fund is currently accepting applications; the committee is to meet every six months to review the proposals. In addition to seed money, fund recipients will also receive support from committee members and their networks.

The criteria for StartHER applications will also evolve. “Going forward, we will take into account other factors, such as transaction flow, to help us determine how we invest and which companies we choose to invest in. Kennedy Explain. “We have a strong focus on making the right investments that will have the most impact versus just realizing returns. ”

Image credit: Mateus Campos Felipe / Unsplash


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