An online crowdfunding platform that works with women entrepreneurs seeking to raise funds for their startups and small businesses is launching a new initiative focused on women-led ventures in the Triangle and the Triad.
The localized crowdfunding effort, iFundWomen Raleigh, is seeking applications through May 25 from its first group of women-led startups and small businesses. The initiative has won support from the City of Raleigh, startup space HQ Raleigh and Pendo, a Raleigh software company.
Liz Tracy, director of HQ Raleigh, said the focus on female entrepreneurs is “is really important for the Raleigh startup ecosystem” given the funding gap that women business owners face.
In addition to its focus on women-led businesses, New York-based iFundWomen strives to differentiate itself from other crowdfunding platforms such as Kickstarter by distributing 20 percent of the profits it derives from its basic fees to the companies seeking funding on its website.
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Karen Cahn, co-founder and CEO of iFundWomen, said that women receive “fewer and smaller” business loans than men and pay higher interest rates. Meanwhile, women-led technology companies attract an “egregiously low” share of total venture capital funding – between 2 percent and 6 percent, depending on the source.
IFundWomen was formed in November and to date nearly 100 companies have raised about $560,000, Cahn said. IFundWomen is a “rewards-based” crowdfunding site in which companies offer inducements, such as T-shirts or products, to attract cash. Those who provide funding do not receive an ownership stake in the business.
The Raleigh initiative is the second “hyper-local” site the company has launched; a Nashville site launched March 24 has raised $150,000 for 50 companies so far. About one out of every four applications for the Nashville site was accepted after the applications were vetted by iFundWomen.
Applications for the Raleigh site are being accepted at http://beta.ifundwomen.com/raleigh. Submissions from “multi-gender co-founder teams” are welcome.
“Data shows that multi-gender co-founder teams perform better than single-gender co-founder teams – all men or all women,” Cahn said.
One limitation of crowdfunding sites in general is that “typically, the people that fund somebody’s crowdfunding campaign is someone they know in real life” such as a friend or family member, Cahn said. The goal of grouping companies by region is to provide an easy way “for people who want to support Triangle and Triad female entrepreneurs” to go to one site and, hopefully, provide funding for more than one business.
IFundWomen receives 5 percent of a company’s funding as its fee. In addition, companies whose applications are accepted can pay $299 for 3 hours of coaching on how to reach their fundraising goal.
James Sauls, manager of Raleigh’s Economic Development Office, said the effort’s inclusivity and its focus on small business and startups align with the city’s values and goals, and it has the support of Mayor Nancy McFarlane. He said the city is not providing any financial support but is helping in other ways, such as helping to connect iFundWomen with local companies.
McFarlane – who is herself an entrepreneur and co-founder of MedPro Rx, which was sold in 2014 – was traveling in India on Monday and couldn’t be reached for comment.