How to Raise Money for Your Startup

We asked the members of the 2020 Female Founders 100 for their best advice about money. These are the highlights.

Suma Wealth
If you go into a room where everyone looks the same and no one looks like you, think, “No one has my experience, and that’s why I’m valuable.”

Eight Sleep
To build a strong, diverse investor roster, you need to start early and be patient. It’s much easier and better to get women investors in the early rounds.

The Alinker Inventions
All my employees make a living wage, as determined by the MIT calculator. I think I make around $21 an hour. I refuse to focus on money: It takes all of us to run this company and to build this community.

Just when you think you really should give up: Don’t. With the five minutes extra that you put in, there might be someone around the corner who wants to help you. It happens just at that moment where you’re like, it’s not going to happen.

Outer Aisle
We had to raise money to build our manufacturing facility. There was so much skepticism from investors. We made a pact that we wouldn’t be desperate to get the money. We walked away from some deals with far-reaching onerous terms. If you don’t do the math and understand what the legal covenants mean, very quickly an investor owns your company. Also: Get a very good securities attorney.

Learning how to tell our story differently was the biggest thing that allowed us to raise $17 million. Investors tend to ask female founders mostly “prevention” questions–in other words, how are you going to mitigate risk? Male founders mostly get “promotion” questions: How big can this be? If you never get the opportunity to paint the biggest picture of your business, you never get to tell the real story. Even if you get a prevention question, respond with a promotion answer–tell them how big your business can be. Present the biggest picture of your opportunity. Show them you aren’t thinking small and go for it.

Don’t spend money on intellectual property because your engineers are proud of what they built. Spend your IP budget on protecting your product offering and discovering if there’s actually a market for it.

If you choose to go the investment route, make sure you really understand the power dynamic: You’re trying to get money from someone, and you’re selling equity. That doesn’t mean you don’t have any power. You need to ask: Are they a good fit for what you’re building? And if they aren’t, you should feel OK and empowered to say, “Thanks for considering us. I don’t think it’s a good fit.”

Daily Harvest
You need to really hang in there until you can find investors who are aligned with your values and believe in what you are trying to do. Values can easily go by the wayside when you’re thinking a dollar is a dollar no matter where it comes from. But it really isn’t.

My definition of a great venture capitalist is not whether they write me a check, but whether they teach me something about my business.

Most of the advice that I got in the beginning was to raise as much money as possible. I believe the opposite. Especially now. It’s all about efficiency.

Good Nature Agro
In impact investing, there are still investors who have a mindset of, “We are going to help those poor people in Africa.” That’s not what you want. Look for people who understand that you’re building a business to solve a problem.

Do not quit your well-paying day job with benefits to become a startup founder. Starting a business is hard, gritty work. It pays zero for a long time, and you need to be financially stable while you’re building your business.

Global Mobile Finance
Focus on a particular type of investor. I needed to focus on a global thinker, and someone who shows that by how they walk, not how they talk.

I had to get to where I was comfortable with the business not happening. And when I finally arrived there, the money came. When you release yourself of expectation or hope, it changes your confidence and your being, and people see that about you.

Explore the Female Founders 100

From the November 2020 issue of Inc. Magazine

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