A new study, released last week at CES 2019 and entitled “This is Women’s Work: Stepping Up Startup Culture”, reiterates many of the same (disappointing) insights around women’s experiences in the startup world that previous surveys have found.
However, a few novel insights emerged, one being the tendency of women to employ crowdfunding as a means of investment at substantially higher rates than male counterparts. In fact, the study overview, provided by Refinery29 and Berlin Cameron, says that women are twice as likely as men to have found a crowdfunding platform useful in fundraising.
The study does not delve into specifics on which platforms women are using, but there aren’t a shortage out there — the number of crowdfunding sites has increased every year since the the 2008 financial crisis, which helped kickstart the funding mechanism’s popularity.
EnrichHER thinks women can benefit even further from crowdfunding with a female-specific platform. The startup, based in Atlanta, has developed a fully-accredited (by both the Financial Regulatory Authority and the SEC) online platform for women entrepreneurs to access debt-based funding to build their businesses.
Do we need a female-specific site? While only time will tell, the Refinery29 study also found that when seeking capital, women are more likely to tap into women-specific funding networks.
EnrichHER also provides more screening up front than many of the generic platforms. The entrepreneur creates a profile, or “campaign,” on the EnrichHER Funding site to share details on what they intend to do with the money, their financial milestones, and their preferred transaction currency.
Approved lenders can then connect with these entrepreneurs to fund campaigns. The platform helps them conduct due diligence, develops the necessary documentation, and facilitates the actual transaction.
Both founders and funders are screened by the EnrichHER team, but the lending model is powered by a machine learning-based risk algorithm. The company takes a flat listing fee when campaigns go live, as well as a percentage-based funder transaction fee and campaign fee.
EnrichHER Funding lenders do not have to be accredited investors to get approved by the platform. That means they can invest much smaller amounts of money than traditional angel investors, anywhere from $100 to $100,000, according to co-founder Tiara Zolnierz. Since these are all debt investments, founders don’t give up any equity in their company like they would in a traditional venture deal. The loans can range form $30,000 to $75,000.
Zolnierz says that the beta of the funding platform already has seen over 100 women-led businesses apply to open campaigns. 10 have been approved, with a total amount of funding sought of about $250,000.
The beta opens up fully to the public at the end of this month.
For the last few years, Zolnierz’s co-founder, Dr. Roshanna Novellus, Ph.D., has been hosting events across the country to help expose women to alternative funding methods. These events have helped drive interest in their early version of the platform.
The team went through the Halcyon Incubator in Washington D.C. this year, a prestigious early-stage startup incubator that focuses on social impact ventures. And just last week, they landed a coveted spot as a finalist in the official SXSW Pitch competition in the Social & Culture category.
The SXSW Pitch is one of the most-anticipated events at the massive technology, entrepreneurship and culture festival in Ausitn, TX. EnrichHER was selected as one of 50 finalists out of over 800 applications.
Zolnierz says the Pitch competition will expose them to additional potential users and funders, as well as investors.
“We are looking to recruit lenders interested in investing in pre-screened women-led ventures, access to women-led ventures that are looking for funding, and supporters who can join us in putting action behind this cause,” she tells Hypepotamus.
EnrichHER has raised $250,000 thus far, and is now fundraising a $500,000 bridge round to develop additional technology, including a blockchain-based secondary trading market, and hire new team members.
“Our goal for 2019 is to fund 100+ women-led ventures through our platform,” says Zolnierz.