Crowdfunding may be changing the rules of the financing game–witness the nearly $8 million plus that the Pebble smart watch raised on the site Kickstarter — but many entrepreneurs still want to raise venture capital.
And though seed money is flowing, as you’ll see in Forbes’ Midas List, it isn’t as easy as some news reports would make you think to raise equity capital. There’s a small universe of businesses that actually raise this form of financing. According to CB Insights, venture capitalists only invested in 785 companies in the first quarter. While that’s the second highest number in nine quarters, it obviously represents just a handful of all of the startups that are out there.
So how do you get your hands on some much-needed investment capital? You may get some ideas from Amanda Steinberg, founder and CEO of DailyWorth, an online community to help women build their net worth that now generates “multimillion” dollar revenue through advertising deals with companies such as ING Direct and OppenheimerFunds.
Launched in January 2009, the 14-employee site–which sends out free emails on finance in a model similar to DailyCandy’s–has raised $3 million in equity capital from investors such as Dave McClure‘s 500 Startups and Google executive chair Eric Schmidt‘s Tomorrow Ventures. While $3 million is not a record-breaking figure, plenty of entrepreneurs would be happy with that amount of cash to grow their business.
Here are five strategies you can steal from Steinberg—a Philadelphia-based serial entrepreneur who previously ran web engineering companies—to grow your own business.
- Stay way ahead of the trends. Noticing that more women were earning six figure salaries and becoming breadwinners—yet few financial publications were paying attention to their unique challenges—Steinberg didn’t wait around for someone else to help them. The now 34-year-old entrepreneur formed her own digital publishing venture to do so herself. “The number of women who are $100,000-plus earners is growing at a rate of about 7% a year,” she notes.
- Find a unique focus. Realizing that many publications focus on teaching female readers how to save money, Steinberg aimed to fill another niche: “Our mission is to support women in becoming investors and building net worth,” she says. “We’re really gearing to differentiate ourselves from all the other financial media out there that focus on frugality.
- Look within to find ways to connect with your customers. Steinberg is fascinated by the social stigma against very ambitious females, being one herself. “There were times I felt like a freak because I had such big goals as a woman,” she says. Rather than let herself get derailed by that, she realized that there were other women who felt the same way—and tapped her personal insights to make Daily Worth more authentic.
- Play the game your own way. While Steinberg is ambitious about growing her business, she also wants to have time to enjoy being with her children, ages 3 and 5. Result: She organized the business so she has a flexible schedule. “There are many days when I have to stop work at 4 pm,” she says. “It doesn’t mean I don’t start again at 9 pm.”
Though she travels once a month, she’s arranged for her vice president of sales to handle more of the trips to meet with clients than she does. Steinberg makes it worthwhile for her colleague to handle this responsibility by providing a nice chunk of equity in the business. “I can’t be looking at my kids 10 years from now and saying, `So sorry I never saw you in your childhood,’” she says.
Of course, with outside investors betting on her, she makes sure to deliver results. “They don’t pressure me a lot,” she says. “We’re making our numbers, so they don’t have reason.”
- Wing it when you have to. There are times every CEO gets caught unprepared. How well you think on your feet in these situations will play a large role in the success of your business. Realizing she’d gotten mixed up about the time of akeynote speech she had to deliver, Steinberg lacked childcare and had to improvise. “I had my daughter on my hip as I talked to 200 male bankers,” she recalls. “I was feeding her Froot Loops.” No one said a word about the tot she brought to the podium– “Who knows what they were really thinking?” she asks–and apparently, whatever impression she made did not slow her down. As she’s discovered, a little resourcefulness can go a long way.