There’s no doubt about it: Women-led businesses still lag behind when it comes to obtaining funding. Venture capital funding hovers around 13.5% for all women-led businesses, while women of color face steeper hurdles. For example, less than 0.50% of funding went to black women business owners in 2021.
At the same time, 42% of US businesses are owned by women, and one-third of businesses worldwide are women-led. According to the National Women’s Business Council (NWBC), women investors are more likely to invest in startups—thus fueling innovation.
Women entrepreneurs focused on climate solutions face another challenge due to their industry. While every industry sees fluctuations in investor funding, total private equity in climate tech decreased by 50% in 2023.
Women founders must then navigate sparse funding and do more with less. But there are ways to improve cash flow, tap into more funding, or fill the gaps in working capital.
5 Ways to Get More Funding
1. Consider all your Funding Options
When founders think of funding, they often focus on venture capital or angel investors. However, there are likely multiple funding options that would increase their chance of getting funding while reducing the amount of equity they give away to individual investors.
Grants, in particular, offer women-led startups a chance to secure capital. Lines of credit, personal savings, contests, and similar opportunities provide funding solutions. Considering how these elements could influence your budget can also help down the road, such as filling gaps in VC funding or having capital to extend runway time.
2. Apply to niche grants and VCs
Several venture capital firms and grant programs are specific to women-led startups or climate solution businesses. The Small Business Administration (SBA) offers several funding opportunities and resources for women business owners but there are many more private grants, too.
For example, there are grants and awards specific to women, regardless of their industry:
The Amber Grant – A $10,000 grant for women entrepreneurs with no time in business requirement that is perfect for startups.
Cartier Women’s Initiative Award – A program with awards of up to $100,000 for women-owned businesses focused on social, economic, and environmental development.
EmpowHER Grants – This grant program awards up to $30,000 to women-owned businesses driving solutions for poverty, food security, public health, equal rights, sustainable development, and climate change.
There are also climate-specific grants, such as:
Wallet Max Bold World Awards – Wallet Max awards three startups supporting SDG goals with both monetary and non-monetary benefits.
ClimateWorks – A foundation that grants funding to hundreds of businesses and tackling climate change across industries.
The EarthShot Prize – A contest that recognizes and helps fund impactful startups.
Likewise, there are niche venture capital firms focused on supporting women or climate initiatives:
Backstage Capital — This investment firm funds women-, people of color-, or LGBTQ-led companies.
Fearless Fund – This offers pre-Seed, Seed, and Series A funding for businesses led by women of color.
World Fund – Based in Germany, the World Fund funds climate tech companies in the early to growth stages.
3. Target Clear Climate Goals
No matter where you seek funding from, it’s important to be transparent and clear about how your solution will be planet-positive. Linking your operations to the United Nations (UN) Sustainable Development Goals (SDG) is a great way to start. Impact projections and reports can also help differentiate your green startup and improve your chance of getting funding.
4. Connect with Strategic Partners
Designing, developing, and testing a climate solution requires significant resources. Partnering with key suppliers can help offset costs while giving potential investors confidence in your ability to create a sustainable startup.
5. Lease Equipment or Solutions
Another way to increase funding while developing partnerships is through off-balance sheet structures. One way is to set up subsidiaries in which you can offer equipment or products for lease or rent to other businesses. This can also be a way to better test products and get customer feedback—while boosting cash flow.
The Best Way to Grow
Scaling your business or startup hinges not just on capital but on your network. The right partner or investor can help you solve challenges and discover new paths toward a planet-positive future.
In the Wallet Max Hub, we bring investors, business owners, and consumers together for a supportive eco-business network. Our hub makes it easier than ever to collaborate on climate innovations and discover other diverse businesses.
Learn more about investing, climate tech, and sustainability, and join the Hub today.