Katherine M. Dean is a Certified Financial Planner and Founder of OpalWomen at Opal Wealth Advisors. She is a passionate advocate for female entrepreneurship, an international speaker, and a financial advocate with more than 20+ years of experience in the wealth management industry. We spent some time with Katherine as part of a series of conversations on seed round fundraising for women.
Female Mavericks: How do you know when it’s the right time to raise seed round money?
Katherine: Let’s get the elephant out of the room right away. Money can be a very uncomfortable conversation. We all have hidden beliefs that run our money conversations. Working with female business owners, I often see that they are “ready” to ask for money much later than a business coach would tell them to. Why is this? I think it’s because we, as women, think we have to have it all figured out before we ask for help, and that includes money. A good idea is a good idea, and a profitable idea is a profitable one. The point is that you should probably be asking for capital before you are ready to expand a business.
Female Mavericks: What are a few keys to selling yourself and your business?
Katherine: Great question, be clear and concise about where your business is heading and why you need seed round funding. Keeping a good set of books and records, profit and loss statements, and cost of goods sold/services provided. Have a business plan and a deck for projections for the future. Be ready to talk about where the seed round funding received will be allocated and how it will fund business growth.
For instance, I’ve seen many people start businesses as a grassroots idea. Then it takes hold, you are a one woman show, you are concept, creation, and fulfillment. You have no employees and no guidance and you’re profitable at this point. Imagine creating a business plan where there are two or even ten of you scaling up the business. It’s creating the vision – the who, what, where, and how and selling that to someone looking to invest in your business.
It does need to be specific; the financials and execution for growth need to be clear. It’s also important to either be mentored by someone who has done what you are looking to do or be in an incubator. Before joining, make sure these mentors have access for introductions, access to a network of people that may support your business growth, finance your business growth, and can guide your next phase of growth.
Female Mavericks: Are there grants for women available who don’t have businesses with revenues/profits yet? What are the best resources for those grants?
Katherine: There are many grants for women, but the competition can be fierce and cumbersome. Not to say that you should give up right now, but check out local organizations that offer grants through application processes. Networking groups, local women’s organizations, women’s national organizations, women’s funding can come through grant writing and through small business loans. Local credit unions and banks often offer the opportunity to apply for small business loans and SBA loans.
I’d even offer “pitching” your business to friends and family to see if they would back your business idea. Some of the best conversations I’ve had are those watching women get uncomfortable while sharing a business plan. First, it allows you to share an idea, get feedback, and revamp what isn’t clear for the audience. It gets your feet wet without missing the opportunity of applying for a small business loan or grant. Then, revise and make your message and business plan even more concise. The fact remains that women struggle for seed round funding or asking for money, so the BOLDER the better when it comes to asking for funding.
I recommend reading this article as a good place to start: 41 Small-Business Grants for Women
Female Mavericks: Are there any industries that will be more or less successful in raising seed round/pre-seed money?
Katherine: From my experience, women in tech or who have tech ideas can raise seed money a bit easier, as they can usually show growth models and a need in their industry. My opinion is that tech is an easy buy-out to incorporate with other tech ideas. It can be an added cog into a larger tech wheel. There are also known pitch opportunities for the tech field. With the AI expansion and everyone on their tech devices all day long, it’s easy to understand why tech gets seed round funding. That being said, for women in tech, it’s still a very low percentage in the low single digits. According to Women Who Tech, women in tech receive 2.8% of all investor funding to startups founded by women, while 97.2% of funding is distributed to startups founded by men.
It becomes a lot sparser for women with an item in the food industry or a concept for a children’s toy.
What I can offer is that there is value in women in numbers. What I mean by this is that being in more conversations with more women creating businesses, in a think tank or incubator will expand the visibility. Women supporting other women’s business will create the shift in the start-up community, regardless of what type of start-up that may be.
Female Mavericks: Tell us your best story about someone raising this money/getting a grant and where they are now?
Katherine: I have a friend that is in construction, a pioneer in the industry being a female-owned construction business in New York City. What started out as breaking through many glass ceilings and focusing on getting funding, she quickly became registered through WBENC (this organization has grant opportunities as well) and started submitting for construction jobs as a women-owned business. What started out as a plan to grow to have a project manager on staff has turned into a women-owned business with large contracts and 10+ employees and contractors.
She does have to bid for jobs, and at times, she loses the bids, but the bids that she wins have grown her company larger than she initially thought was possible. She attended networking events, industry conferences and watched and learned from others doing what she wanted to do, she asked a lot of questions and went to her local business organization and even today continues to receive guidance. There are small business associations all over the United States and they offer assistance and connections and also the possibility of small business loans or grants.
Female Mavericks: Is there something that women business owners often miss when being in business for themselves?
Katherine: I’d like to not forget why we, as women, go into business and take a chance on ourselves. We all have different reasons. Possibly it’s to stay home with your little ones, perhaps it’s to make an additional income, or it could be to no longer have a boss. There are thousands of reasons. I would be remiss if I didn’t touch base on the benefits of owning a business that makes a profit and what to do next.
As a business owner, working with a team of professionals who help guide you with financial decisions is an important one. A CPA who can review your books, share ideas and details about profitability, and file your tax returns is just as important as working with a financial advisor who can assist you putting some of those funds away. Whether it’s making sure you have a retirement plan such as an IRA, SEP IRA or 401(k) or assisting you with exist planning from the business after it’s grown. Having the right people in your corner to bounce ideas off of, and who understand your business goals from one year to the next 10 years will be very important. Growth in a business is wonderful, having the right mentorship and network around you supporting this growth is just as important.
More About Katherine
Katherine M. Dean works with couples, widows, executives, and women business owners to achieve financial peace of mind. Through the Opal Way, we establish meaningful goals and actions, develop a winning financial formula, and provide personalized attention to stay on track.
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