Most budding entrepreneurs will look for any and every opportunity to help build their small businesses.
And thankfully there’s a ton of resources out there for startups looking to grow - ranging from government grants to pitch competitions with the promise of cash awards or investment funding. In fact, according to data compiled by online database PitchBook, in 2017 alone, venture capitalists invested $85 billion into independent entrepreneurs.
Unfortunately for small business owners like Shani Dowell only 2.2% of all that money finds its way to female-founded enterprises. Dowell is the creator and CEO of Possip, a platform that simplifies feedback and communication between parents and schools.
First launched in 2017, while also juggling a full-time job, Dowell was able to grow her company from a single school willing to test out her idea to now over 100 schools in sixteen states.
Possip’s success story wouldn’t surprise anyone who studies the data. In fact, Fortune Magazine did the math just last year and revealed that women-run startup companies actually outperformed their male counterparts, generating more revenue - 78 cents per dollar for women compared to 31 cents for men - despite getting less funding.
While those results are promising, it doesn’t make the struggle for women and people of color any easier. “We still have to work twice as hard to get half as far,” Dowell said. “I applied to lots of stuff, and some of that took hours and hours and hours to apply to. And if you get to the next round, it’s more hours, and then the next round, even more hours...”
The application stage itself for many startup competition programs can eat away at critical time most entrepreneurs simply can’t afford to spare. Dowell compared it to playing the lottery. “You invest all this time and you get, if you're lucky, some feedback on the other end. But you've just spent five to ten hours that you could have spent in lots of different ways,” she said.
The low odds and significant application demands, Dowell believes, traps entrepreneurs in a time-squandering cycle. “I think part of why women and people of color do this is because we don't have the same networks,” she said. “At least this is a path and this is something concrete I can be doing towards my business.”
It was this very issue that inspired Dowell to write an article for Medium.com entitled, Are Efforts For Diverse Founders Helping or Hurting? While she made it clear to her readers that she is grateful for all the opportunities that have come from the programs she participated in, she questions whether these efforts are actually helping those who need it the most.
“Women and people of color are being asked to apply to more things with lower pots and low likelihood of winning,” Dowell wrote in her article. “The more time they spend applying to opportunities that don’t yield anything on the other end, the less time they have to build their business.”
Dowell went on to suggest companies, accelerators and VCs that really want to help minority business communities should ensure the time entrepreneurs spend applying for the programs should yield something helpful on the other end.
“Make sure there is more than a press release,” she wrote. “Make sure that your efforts to increase equity in funding and supporting entrepreneurs doesn’t disproportionately put the burden on those you are seeking to serve and support.”
All that said, Dowell doesn’t plan to stop applying for programs that offer investment and business resources to women and people of color. She’ll just do it smarter. Her advice to fellow entrepreneurs is not to apply to every program they can find.
And if you’re still going to enter the pitch competition? “Make sure you are spending at least equal time tapping into networks, thought leaders, and individuals outside of your natural networks,” Dowell advised.
To hear more about Possip’s incredible growth and Dowell’s advice for diverse founders looking to accelerate their own startups, be sure to listen to the full episode above! And don’t forget to subscribe to Navigate wherever you get your podcasts.
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