Why Some Women Entrepreneurs Struggle with Funding
HOST INTRO: The city of New York launched a new program last month to help women in business. WE Credit offers loans up to 100,000 dollars for women-owned businesses that qualify. As Cynthia Betubiza reports, the program aims to shrink the entrepreneurship gender gap.
[SOUND OF CHIT CHAT]
BETUBIZA: About 30 people crowd into a conference room in SoHo. Men are decked out in tailored suits. Women in pencil skirts and sharp blazers. It’s Pitch Day at the Entrepreneurship Lab for Bio and Health NYC.
[SOUND OF APPLAUSE]
PITCH DAY PRESENTER : We have our next venture pitching – Halo Mountain Therapeutics. Please help me welcome Eleanor.
NARRATION: Eleanor Haglund is the CEO of a startup called Halo Mountain Therapeutics. Haglund’s company is in search of a new drug to stop Alzheimer’s.
HAGLUND: …and oxidative stress in the brain.
BETUBIZA: The company wants to develop a drug that attacks inflammation in the brain. That’s one of the factors that contributes to Alzheimer’s.
[SOUND OF CHATTER FROM PITCH DAY]
BETUBIZA: Haglund is 24 years old. It might sound strange that someone so young is dedicated to stopping a disease that affects mostly old people. But for Haglund, it’s personal.
HAGLUND: My grandfather developed Parkinson’s, my grandmother developed Alzheimer’s, and my great grandmother developed Alzheimer’s, so I saw first-hand the affects these diseases have on people and their families
BETUBIZA: For both men and women, the biggest challenge in starting a new business is raising money But for women, it’s even more difficult.
A study from the journal Venture Capital found that 97 percent of investment funds go to companies led by male CEOs. One of the reasons: It’s easier for men to make connections in networks that are already dominated by men
[SOUND OF JULIE SHOWING NEW EMPLOYEE THE ROPES]
BETUBIZA: Just a few subway stops uptown from the Pitch session, Julia Sokol is showing a new employee around her dance studio…..
[SOUND OF RIHANNA MUSIC FROM DANCE CLASS, SOUND OF CLASS]
BETUBIZA: Sokol owns SassClass. It’s a dance studio for women – designed to help them embrace their feminine power.
Sokol needs money too.
She opened the studio in 2016. At first, she rented out a dingy space. It helped keep prices low for members. She also relied on her own savings to fund the place.
SOKOL: I worked for seven years in corporate and I made really good money and so I felt like I had a really nice cushion under me.
BETUBIZA: But her cushion deflated fast.
SOKOL: It runs out quickly when you don’t have any more money coming in to replenish it.
BETUBIZA: In a New York City government survey, 90 percent of women said that they use their own personal savings to fund their ventures.
Sokol wants 100,000 dollars to expand her team and invest in marketing and advertising. She hasn’t tried to get an official bank loan yet. But she’s found an angel investor, a relative who supports her vision.
Right now, Sokol’s overwhelmed and a little afraid to start asking strangers and banks for money. And she’s not alone.
GILBERT: The thing that I’ve seen with the over 200 women that I’ve worked with is really self doubt…
GILBERT: …there is this invisible challenge that we have with ourselves…about how much self doubt we have and how that holds us back.
NARRATION: All that self-confidence stuff might sound mushy-gushy and sentimental. but it’s been quantified in studies.
A New York City government survey. Found that 40 percent of women said lack of confidence was a significant to moderate barrier in raising capital, while only 31 percent of men said the same thing.
[SOUND OF PITCH DAY]
BETUBIZA: Back at Pitch Day, a slide goes up during Haglund’s presentation with her big ask: 2.5 million dollars. That’s how much Halo Mountain needs to do more studies to prove to the FDA their drug is safe.
Haglund’s one of the youngest people in the room, and one of just a few women.
With such high stakes for her company, I ask her: What happens if no one here in this room invests a dime?
HAGLUND: In my mind, the worst that could happen is that someone says no. And I suffer a little bit of rejection and I move on because now I know that’s a door that wasn’t open…
BETUBIZA: And she then can move on to another door—to see what’s behind it.
OUTRO: For Columbia Radio News, Cynthia Betubiza