Patrice Mousseau is the Ojibway founder of Satya Organics, based in Vancouver, BC. In 2017, Patrice won the Startup Canada Indigenous Entrepreneur of the Year Award and the UPS Demo Day on the Hill for the success and impact of her company and leadership in Canada’s entrepreneurship community.
Building a business from scratch is difficult – think finances, human resources, location, and other factors. Being a woman and a minority in business is harder still. Fewer than one in six small and medium-sized businesses are majority-owned by women. Besides that, women entrepreneurs are also less likely to seek growth for their companies and export compared to men.
While various factors contribute to the low participation rates of women and minority entrepreneurs, one of the most significant barriers until now is still access to capital, with women accessing only four percent of all venture capital in Canada. This rate is even lower for women of color. Women and minority business owners often face trouble accessing loans from banks and other financial institutions due to systemic and agent barriers. Frequently, the burden of proof and required leveraged assets by banks is higher for women and minorities, as are interest rates from lenders.
Gender and racial stereotypes are the reasons for inadequate access to capital as well. Investors view women entrepreneurs as non-risk takers, making them less likely to buy into their businesses. You do not need to be a rocket scientist to know that having access to capital is essential for every startup business. Access to capital is a critical factor in the success of any companies.
Step 1: Build a stable business operation and meet financing requirements
For the ambitious businesswoman and other minority entrepreneurs hoping to find a breakthrough in funding, be sure to meet the criteria of the financer as closely as possible. Research who has received funding in the past and try to mirror the steps they took. Be more visible, demonstrate stability, and show them that you have a stable, well-established business operation in place.
Step 2: Network, network, and network
Women and other minorities interested in building their businesses should try to meet more like-minded entrepreneurs for mentorship. You always need to be networking and learning from other entrepreneurs to gain insights and lessons learned from others. This is a great way to build your reputation amongst the support ecosystem and potential investors.
Step 3: Try creative approaches to financing
If traditional methods of funding fail, try capitalizing on other nonconventional options like crowdfunding or ventures with SheEO, which creates a pool of funds generated from donors which will act to help other women entrepreneurs startup and scale their companies. Women’s Enterprise Centres across Canada also offers business loans for women-owned businesses. The loans are different compared to the traditional lenders because they provide free, ongoing business advice, business skills training, and access to mentors together with loans.
With refined preparation, networking, seeking better routes for accessing capital, women and minority entrepreneurs can try to overcome barriers to obtaining funding in the future.