Often because, in short, they don’t ask for it.
I was chatting with Bunmi Zalob, publisher of WomenEntrepreneur.com’s Secret to Serenity blog, about “playing small.” And why women seem to do it. The sad truth is that studies show that women do it to themselves over and over.
A recent study showed that female entrepreneurs are far less likely than their male counterparts to seek angel financing . . . and that one of the reasons they are not getting angel financing is that they arenât asking for it. As my mother taught me, “If you don’t ask, you don’t get.” (She had a corollary, too “You still may not get even if you do ask, but you definitely won’t if you don’t“, which she usually tossed out when I asked to borrow the car, or to stay out late). Over four years ago, I wrote an article on women and negotiation, based on a study reported in the Harvard Business Review. The study showed that men were more likely than women to negotiate for what they want in employment situations, whether that be higher salaries, choice assignments, or time off. Why do women do this? The study found that
- Women are often are socialized from an early age not to promote their own interests and to focus instead on the needs of others.
- In many situations, women are “penalized” when they do ask (for example, being labeled as pitchy or pushy), which further discouraged them from doing so.
- Having become disenchanted with the situation, women tended to quit their employment situations, rather than use a better employment offer as a negotiating tool.
Extrapolated to the entrepreneurial world, this hurts us in a number of ways:
- Not asking for referrals from satisfied clients
- Not raising our rates, even though our costs of doing business have increased
- Not asking for business from networking clients
- Giving up, rather than developing a team of mentors or peers to help us find creative solutions.
Julie Lenzer Kirk, who came across the angel financing report, thought that the top reasons women didn’t ask for this kind of help were:
- Women donât like to ask for help (sign of weakness) or donât know where to go for it.
- Women start businesses for flexibility and control and resist outside assistance that might disrupt that.
- They donât think BIG enough.
What do you think? What has helped YOU to think big?
Nina! Hello Hello! So I found this interesting…I posted that I was “looking for investors and parent companies” the same week you posted this article. I’m just curious as to your advice on my company and getting funding…what are your thoughts on the best way to go about it ?
All the best,
Lauren
I think this post gets it so wrong on so many levels.
I think women entrepreneurs are smart enough – as entrepreneurs – to focus on goals and targets they know they can realistically achieve and work towards – on their own two feet.
It’s also a big point to make that any external financing is a rose with sharp thorns – the entrepreneur risks losing control of their business and direction, and outside investors are usually looking for ways to suck back their original investment with profit for themselves.
Are women dumb to not seek angel financing? I think it shows greater smarts – more realism on their outlook – and that it is dangerously misrepresenting women to suggest they are “weak” by being good entrepreneurs on their own merits, rather than falling to bad decisions like male colleagues perhaps are more prone to.
Great, timely article Nina. I have shied away from getting funding in the past for a variety of reasons – but as I am realizing in the last few weeks, the main reason is fear. I’m not exactly comfortable with the idea of being responsible for so much of someone else’s money and turning a profit. If I’m pursuing my dreams, I’m ok with risking failure on my own dime – but the guilt I would associate to failing on someone else’s dime is quite nerve-wracking indeed.
Nonetheless, it’s a fear I am going to have to get over — and fast, as my business grows faster than I can handle it on my own.
Additionally, I haven’t managed a large budget in the past. What can I do to ensure I am ready for this – and to convince investors of the same? 🙂
Thanks, Wendy — that’s a good question! I think they’ll certainly want to see that you have managed well what you already have. Also, if you alone haven’t had this precise experience, is there anyone else on your “team” who has? And if there is no one else on your team, how are you planning to develop a team so that all of the company’s needs can be met by people who have expertise in those area? A simple solution could be a temporary CFO — someone with expertise, but whose comensation doesn’t eat up all of the newly-found capital. Ask those who have walked in your shoes before to get their creative suggestions and insights!
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[…] This ought to keep you busy for the weekend…or two. There are a number of great posts on raising financing. I also found the section on outsourcing and employees […]
Nice post. There’s a similar topic thats related to this in Yahoo answers or Google groups, I think. I’ll find the link and post it back here. This should spark up a good debate.