Nicole Denholder, founder of crowdfunding initiative Next Chapter, explains why women are being served a smaller slice of the financial pie when it comes to funding startups. She was speaking at Hong Kong’s International Women’s Day Networking Event
It seems as if every week in Hong Kong there’s a new diary date involving entrepreneurs, and usually female entrepreneurs at that. Whether it’s a networking event, a new launch, a panel discussion or a pop-up shop, small, female-driven enterprises appear to be big business in this dynamic city. This week it was the turn of the International Women’s Day Networking Event, organised by three local small business owners.
According to studies in the US, female-led startups deliver high returns. Seed-stage venture firm First Round Capital found that companies with a woman at the helm performed 63% better than those with all-male teams. But despite this, companies led by females receive just 5% of venture dollars. Globally, it is estimated just 5-10% of women owned businesses have access to commercial bank loans. Until 1988, women in the US had to have a man guarantee a loan if it amounted to more than US$50,000.
In Hong Kong it’s a similar story. According to The Women’s Foundation (TWF), Hong Kong has a heavy gender skew. A massive 81% of high growth entrepreneurs are male and the ratio of male to female employers is 3.5 to 1. TWF believes targeted assistance is crucial to close the gap and to empower women-owned businesses to reach their full potential.
Nicole Denholder, founder of Next Chapter, a crowdfunding portal for women, has over twenty years in project and merger management – much of it for multinationals – under her belt. When it comes to launching a business, she’s been there, advised on that. Realising that women weren’t getting a fair slice of the investment cake, she was keen to get Next Chapter off the ground.
“Because women aren’t so dominant in business, they don’t tend to have the know-how that men have to access loans, and that is a major drawback,” she says. “Over the last 30 years things have improved, but women are still losing out on dollars when it comes to funding. When you mention an enterprise is female-driven, it’s always assumed that it is low cost. When I tell men I crowd fund for women, the automatic assumption is that it’s for low investment enterprises. Ok, we can’t all be unicorns (startups with a value of over US$1 billion) but we’re often worth more than what is assumed.
With Next Chapter, Denholder wanted to provide some sort of service that involved working with women, pushing female businesses to the next level. The crowdfunding idea is simple, but effective. A project or venture is launched online and investors are invited to contribute a small amount of money towards it in return for the product or service.
This year she’s launching an advisory service to help women sit at the table more effectively. “This won’t guarantee a better loan, but it does guarantee a better fighting chance,” she says. “We want to help women understand business jargon and what is required of them when the talk turns to areas such as ‘equity’ and ‘business value’. If you haven’t been in business before, why on earth would you understand these terms?”
Along with an understanding of how business works, Denholder lists passion and drive as key to success. “One of my clients was in the corporate world but desperately wanted to embrace her creative side as an illustrator. She had the drive, but had never been professionally trained. She crowdfunded a very conservative US$2,000 to launch some Christmas cards, but because this was something she really wanted to do and was passionate about it she really worked hard and this small step has now led to corporate commissions for logos, children’s book illustrations and mural work. It’s a great story.”
Denholder is eventually aiming to launch Next Chapter internationally. “I just want to keep women moving on to the next level,” she says. She recommends women take a look at internationalwomensday.com to find out how they can ‘press for progress’ in 2018.
According to research carried out by HSBC for International Women’s Day, just over half of expat women surveyed viewed Hong Kong as the best area in Asia Pacific to improve their earning prospects. This compared with over 70% who considered Singapore to be the most lucrative country. Hong Kong also trailed Singapore when it came to work culture and personal full-fillment at work. However, the SAR was considered the top place to acquire new skills and 64% agreed it was a good place to progress their careers. For job security, Japan and Taiwan were rated top of the table.