We may have a game changer on our hands. The U.S. Global Entrepreneurship Monitor says that women start ventures with eight times less funding than their male counterparts. According to recent research from The University of New Hampshire Center for Venture Research, only 8.9% of all proposals presented to angel investor organizations were put forth by women.
Women-owned ventures acounted for only 16% of all businesses seeking funding, with only 24% of the women receiving angel investment in the first half of 2013.
But we may start to see some of those numbers change because of a new company called Plum Alley. Plum Alley, which launched just over a year ago, is a platform for businesswomen and female entrepreneurs.
It has just established a new section for crowdfunding, specifically featuring projects started and run by women.
“We are going to discover the next Tory Burch, the next Kate Spade, the next Bethenny Frankel or the next Sara Blakely through our program,” Heidi Lehmann, one of the founders, told The Wall Street Journal.
Men and women tend to seek out investors of the same gender which automatically puts women at a disadvantage since most investors are men. According to The Diana Project, only 10% of VCs are female. Plum Alley aims to change the success rate of female entrepreneurs.
GoGirl talked with PlumValley CEO Deborah Jackson about her mission with this platform.
Plum Alley started out as a platform for female entrepreneurs to sell distinctive accessories and home goods. You’ve recently broadened the business to be a “destination site where women entrepreneurs and innovators succeed with crowdfunding, commerce and experts”. What was the driving force behind this change?
For years I have been watching women as they go about raising money for their ideas and companies. It has not been easy and data shows there is huge disparity in women raising capital versus their male counterparts. At the same time, I know so many women and men (husbands, fathers, boyfriends and brothers) who want to support women in reaching their dreams or doing good for the world. The Plum Alley Fund was a natural extension to facilitate that support and increase women’s access to capital.
The bigger picture is about funding innovation. Women are innovating – new products, new ways of managing, new models – every day. Time and time again, I hear women say “if I just had enough money to build that prototype or buy the materials I need, I would go for it.” So many women, including some of our entrepreneurs featured on Plum Alley Commerce, have visions and ideas yet to be translated into creations.
Many of the innovations funded by other crowdfunding sites have gone on to be marketable and sellable products. Plum Alley offers its project creators an easy, seamless way to sell their products on Plum Alley Commerce, gaining additional attention for their innovations. This integrated approach allows for project creators to focus on their projects and transition smoothly to running independent businesses if warranted.
For anyone that’s still in the dark, please can you help our readers understand the mechanics and value of crowdfunding?
Crowdfunding is an efficient and inexpensive way to fundraise, in which individuals gather small or large amounts of money from a broad base of people. People may fund crowdfunding projects for a variety of reasons — to help a dear friend, to help a charitable cause, to contribute to something they want to exist in the world, to get a coveted reward or to pre-order a product. The list goes on.
In return for their monetary support, funders can choose a “reward” that relates to the project and may range from tickets to an event, signed copies of an artwork, hand-written thank you notes, or a product pre-order. The benefit for entrepreneurs of raising capital this way is that they are not expected to pay the money back or give up any equity or ownership in their companies.
There are other benefits to crowdfunding as well. Running a crowdfunding project is an inexpensive way to showcase and broadcast your idea, cause, product, or company to a broad audience, and can provide a huge marketing uplift. Projects also allow entrepreneurs the chance to see there is a market for their idea or product before they invest more resources or go into production. Finally, crowdfunding allows individuals a way to engage with the project creators and learn more about their stories, visions, and values.
Are you expecting the same kinds of female-led businesses to be using the crowdfunding platform as use your commerce platform or do you foresee any changes?
Our commerce platform focuses on companies founded by women and offers a broad range of products and price points across many categories. As crowdfunding allows women to test-market their prototypes and secure product pre-orders to de-risk their investments, we do expect a large cross-over in the types of projects (product-oriented companies) being funded. However, we expect to see other types of projects being funded on Plum Alley — passion projects, do-good-in-the-world projects, creative projects, and more — we’re seeking women from all industries and walks of life to turn their dreams into realities.
What makes a good crowdfunding campaign?
The team, the project idea, the presentation, and the rewards are all essential. For most successful crowdfunding projects, a large portion of the funding comes from the project team’s network. The team should have a large network and be prepared to invest the time to rally up and excite people to fund their project. Next, a project should be appealing or emotional so individuals are moved to fund the project. The project goal and motivation behind it should be conveyed articulately in the written and video pitch of the project. Finally, good crowdfunding campaigns have valuable and desirable rewards that can appeal to a large array of people.
Why apply to Plum Alley versus crowdfund via existing sites like Kickstarter, IndieGoGo or Rockethub?
The sites mentioned above have proven that people will pay money to support projects they care about online. The market potential is very big for funding from the crowd and I think we are just at the first stage of this evolution. In a big market there is room for many players who understand their own market niche and how to serve them. That’s not to say that women are a niche market, but women do have specific interests and want to see products created that may not be of interest to men. If you consider the look and feel of the other platforms, there is a place for a different experience and focus.
We carefully curate all the content on our site and work with each of the project creators to craft their campaign. Many of the projects are apt to appeal to the larger Plum Alley audience as they stem from products and companies driven from personal experiences and needs that are unique to women. The advantage in project creators using our site is the dedicated team and audience of individuals excited about women entrepreneurs.
Further, Plum Alley has an existing e-commerce platform where project creators can subsequently sell any product that rises from crowdfunding and benefit from additional exposure. Our e-commerce and crowdfunding services and audiences are complementary, and we are recognized as the brand to highlight, support and advance amazing women.
Finally, please can you give us a peek into the expert advice services you’re building. What can female entrepreneurs expect to gain from this aspect of Plum Alley?
Plum Alley is working with another female-founded company to provide a seamless way to connect women innovators and expert advisors. Plum Alley’s panel of experts will be seasoned professionals in various fields, and will be available for hire on a project basis. We are hoping to launch our beta next month. We are actively seeking experts so just fill out the form on our site to be considered.