Women make up 51% of the overall population, yet women entrepreneurs receive just 2.8% of venture capital (VC) worldwide, 4% within Canada. And don’t even ask about how that breaks down into the support for BIPOC women, it’s a negligible number. Literally, we can’t find a statistic on it.
Sure, you can blame the fact that women make up just 15% of the partners at Canadian VC firms, but even then, there’s a gap between funding women received and representation in the decision-making rooms.
When looking at the disparity of VC funding between women entrepreneurs and their male counterparts, it’s often speculated that it comes down to a couple of main things: 1) The venture capital industry is male-dominated (which can result in a “boy’s club” mentality and deals being biased towards their own gender) and 2) Women entrepreneurs are often perceived as risk-averse for caring about social goals as much as economic goals (which might not serve a VCs best interests).
Of course, we agree with the push to diversify VC spending, but, why should venture capitalists have all the fun? When it comes to raising money, why not look to the general population? You know, where 51% are women… Enter equity crowdfunding.
By tapping into the capital of the general public, equity crowdfunding gives all founders a new way to source money. Entrepreneurs are no longer limited to seeking wealthy individuals, or firms solely looking for a big return, investors can be everyday people, looking to support the companies they believe in.
For Linda Biggs, Co-founder of period care brand joni, equity crowdfunding allowed her company to extend its investment opportunity to its community. As part of a partnership between The51 and FrontFundr, joni was listed as a women-led private market investment opportunity to address the gaps in traditional funding spaces.
“We thought it would be a great opportunity to see if we could get a higher ratio of women investors through our community and this platform,” said Biggs via an email interview. “We also loved the idea of opening up these kinds of investment opportunities to retail investors vs the more traditional high-net-worth accredited investors and extending that to our amazing community.”
And joni’s community showed up. Of its nearly $380,000 raise, 43% of its investors were women! Not to mention, the company smashed its initial fundraising goal of $200,000.
As a social enterprise period card band, joni’s mission is to create organic and sustainable period care accessible for everyone who menstruates. Once disposed of, its biodegradable bamboo pads break down an average of 92% within 12 months in the right conditions, compared to 300+ years for conventional plastic pads—an incredible feat! Still, the stigma and shame surrounding period care can make for uncomfortable conversations, especially when it comes to funding. Thankfully, Biggs said this is starting to change.
“It wasn’t until the 80’s when the word ‘period’ was said on television for the first time. Red liquid [vs blue] wasn’t shown on a period care ad until 2020! It’s no surprise that even talking about periods can be uncomfortable,” she said. “This is changing and more investors who believe, like us, that today’s consumers are demanding more, and see the amazing potential there is and how joni resonates with customers from a product, brand and social impact perspective. We’re very optimistic.”
On the path to change the conversation around period care, joni is joined by innovative brands like Knix and DivaCup (both of which were started by women entrepreneurs, Joanna Griffiths, and Francine Chamber and Carinne Chambers-Saini, respectfully).
Biggs said the recent innovation in the space proved to be helpful but also had joni face some drawbacks during fundraising.
“When it comes to raising funds, like throwing a party, no one wants to be the first person to show up and take the biggest risk. So most hold back to see who shows up before coming forward,” she explained. “You also get folks who believe the category is already saturated, which we found interesting, considering how many power bar companies or beverage brands are in the market and are also thriving. We also had people who really believed in us and what we are doing who came forward with early funding that helped us get to where we are now.”
Given the stats around VC funding and the disparity between men and women, it can be a grim and daunting process for women entrepreneurs. Thankfully, as the conversation surrounding this problem grows, so do the efforts to address the disparity. On the macro-level, Biggs credits organizations like The Forum and The51 for working to improve the status quo for women entrepreneurs in Canada.
On the micro-level, she also recognizes the inherent trait of tenacity in founders, men and women, and their ability to see things through.
“When you are in the thick of it as a founder, you just go and do what you need to do to keep things moving,” she said. “It’s kind of like the saying, ‘aerodynamically a bumblebee shouldn’t be able to fly, but the bumblebee doesn’t know that so it goes on flying anyway.’ We just keep flying and that in itself is part of the resistance.”
Looking back on joni’s equity crowdfunding raise, she believes that the alternative way of raising money can prove to be an effective way of addressing the gaps in funding. And not just for women entrepreneurs, but all founders.
“Crowdfunding provides an option that puts the power back into the founders’ hands and gives them a way forward. It also opens up an entirely new market with retail investors vs the traditional accredited investors. That’s huge from both a funding perspective and also a brand awareness perspective.” Biggs said. “Crowdfunding can also help founders who don’t have friends and family to fund the early days (that’s many of us!) and founders who don’t have a network of VCs or Angel investors. It’s an option, and as a founder, having options to keep the business moving forward is important.”
As for what advice she’d tell other women entrepreneurs before exploring their fundraising options, she said to become more familiar with the terminology around funding, like SAFE, accredited investors vs. retail investors, discount rates, etc. During joni’s raise, Biggs leaned on her co-founder, Jayesh Vekariya, who had previous fundraising experience, and quickly learned the ropes herself.
Overall, Biggs wants all women entrepreneurs to know that despite the grim funding statistics, it’s possible to see your vision come to life.
“It’s important to understand your options so you can make the right choice for your company. Dream big.”
Photography provided by joni
Illustration by Anzhelika Bashirova from Ouch!
Giving everyone access to early-stage startup investing.
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