The WallStreet Journal
September 25, 2006

The Money Game

Capital Ideas

Women entrepreneurs have an increasing number of places to reach out for funding. Here's a look at some.
By JOANNA L. OSSINGER

Women entrepreneurs have more sources of mentoring and funding these days. From the Small Business Administration to banks to advocacy groups, a host of companies and organizations are offering programs designed specifically for women that both help beginners get started and help established small businesses grow. Some offer seminars, counseling and events, while others provide loans or equity financing.

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"There has been a very large amount of progress in a relatively short period of time" for women-owned businesses expanding and obtaining funding, says Susan Sobbott, president of OPEN, American Express Co.'s small-business services division.

Women made up about 40%, or 10.4 million, of all small-business owners in the U.S. this year, according to the Center for Women's Business Research, an advocacy and research group in Washington. But only 3% of all female entrepreneurs owned small companies generating more than $1 million in yearly revenue, compared with 6% of all male entrepreneurs.

Getting Familiar

The SBA is often one of the first places entrepreneurs will turn to for loans. But the SBA also offers assistance specifically for women through its Office of Women's Business Ownership, which has about 90 centers nationwide mainly geared to help start-ups. The centers offer seminars, counseling and programs -- ranging from a few hours to multiweek courses -- on starting, maintaining or expanding a business. Some of the one-day seminars are free or have a nominal fee, while the lengthier courses can go for a few hundred dollars. A list of offerings is available at each center.

For instance, the Inland Empire Women's Business Center in San Bernardino, Calif., offers classes like "How to Read and Understand Financial Statements," a three-hour session that costs $15. The Women's Business Development Center in Chicago offers courses such as a free 90-minute seminar called "Take the Mystery Out of Obtaining Financing for Your Business: Loans and Equity."

Participants range from women on welfare to women just coming out of the corporate world to entrepreneurs who want refresher courses. FOR MORE INFORMATION

- SBA Office of Women's Business Ownership (www.onlinewbc.gov) List of local centers: www.onlinewbc.gov/wbc.pdf (Adobe Acrobat is required).

- National Association of Women Business Owners (nawbo.org) To find your local centers: nawbo.org/chapters/index.php

- Count Me In (count-me-in.org)

- Make Mine a Million (makemineamillion.org)

- Ladies Who Launch (ladieswholaunch.com) Find a local incubator: ladieswholaunch.com/incubators.cfm?locate

- Angel Capital Education Foundation (angelcapitaleducation.org)

- Golden Seeds (goldenseeds.com)

- Center for Women's Business Research (womensbusinessresearch.org)

- Wells Fargo Women's Business Center (wellsfargo.com/biz/intentions/women_bus_svcs.jhtml)

Banks also offer outreach and education programs specifically for women entrepreneurs. Wells Fargo & Co. of San Francisco began its Women's Business Services program in 1995. The program works with various women's organizations to help female entrepreneurs familiarize themselves with the different financing options that Wells Fargo offers and guide them through the application process. For instance, representatives of the program can be found at seminars and events nationwide run by the National Association of Women Business Owners, a Washington-based group with local chapters that range in size from about 70 to 400 members.

Joy Ott, spokeswoman for the Women's Business Services program at Wells Fargo, says one of the goals is to give women more confidence in their ability to secure loans. "There are traditional forms of lending [that] male counterparts are using a lot more than women are," she says. Wells Fargo says it has made more than $26 billion in loans to women small-business owners since it started the Women's Business Services program 11 years ago.

Some organizations, meanwhile, are focused on helping women make the most out of their businesses.

Through its local chapters, the National Association of Women Business Owners offers seminars and teleconferences for its members. Some events are open to the public, while others are for members only. Some events are free, while others charge a fee for members or guests.

An association council in Dallas will host a finance-oriented program in November titled "Avoiding Cash Flow Headaches." And a recent seminar in Buffalo, N.Y., called "How to Make Sure Your Loan Is Approved," focused on what business owners need to do -- both on a personal and business level -- to qualify for a loan.

The association is primarily for owners of established businesses, though novices sometimes participate as well. It's a place where "women can share the challenges of being a business owner," says Erin M. Fuller, executive director of the national group. Among those challenges: the financial impact of bringing in more employees.

Ladies Who Launch, a New York-based organization founded and run by business-development experts Victoria Colligan and Beth Schoenfeldt, also helps women expand their businesses. Among the organization's offerings is a Web site, LadiesWhoLaunch.com, where women can find business tips and case studies of other female entrepreneurs. Another perk: The Web site has a classifieds section where women can run ads to promote their businesses. It costs members $30 to keep a listing up for 30 days.

The group also has an incubator -- a forum of sorts -- that helps women develop business ideas and network with other Ladies Who Launch members. To be a part of the incubator -- which costs roughly $250 to join plus about $300 to $400 a year -- members must first complete a workshop lasting a few hours, where they get help sharpening their business ideas and developing ways to put those plans into action. After that initial workshop, members meet eight times a year to discuss how their businesses are doing and to network with other members. The women also can communicate with each other via forums on the Web site.

Ms. Colligan says that once the women in Ladies Who Launch begin interacting with each other, they advance their businesses more quickly because they're getting encouragement and pointers from their peers. "Other people can think differently and bigger than you can for yourself," she says.

Million Dollar Women

Another group geared toward helping established businesses is Count Me In, a New York-based women's business-advocacy group that provides resources and microloans. In partnership with American Express's OPEN, Count Me In last year launched a program called Make Mine a Million, with the goal of having one million women-owned businesses with $1 million in annual revenue by 2010. There are 242,000 so far, according to an OPEN spokeswoman.

Make Mine a Million holds two events each year, one in New York and one in San Francisco, where women present their business plans and judges and audience members vote on the winners. For each event, 40 women are invited and 20 are chosen as winners. The winners receive mentoring, a line of credit from OPEN and marketing assistance from home-shopping company QVC Inc. of West Chester, Pa. To qualify, the women must have been in business at least two years, bring in at least $250,000 in revenue each year and have a plan to increase revenue to the $1 million mark. Applications are being accepted through Sept. 29 for the next event, which is being held in New York on Oct. 24.

Maureen Borzacchiello, a recent winner of Make Mine a Million, runs a business in Lynbrook, N.Y., that provides trade-show displays and marketing exhibits. She says the Make Mine a Million program "has been wonderful for me," citing the mentoring, camaraderie with other program participants and access to financial resources.

Ms. Borzacchiello says one of the things that helped her most was a session where Jed Scala, vice president of small-business financing at OPEN, talked about good debt versus bad debt and how many women entrepreneurs wrongly perceive all debt as something to be avoided.

Count Me In also provides online microloans for women business owners. Ms. Borzacchiello says the $45,000 in financing she received from Count Me In helped her expand into a new facility this year.

Finding an Angel

Some women are moving businesses forward with the help of angel investors. In fact, many more women are becoming angel investors -- and many of them are interested in helping female entrepreneurs, according to Marianne Hudson, executive director of Angel Capital Education Foundation, Kansas City, Mo., which helps angel investors find suitable ventures and entrepreneurs find angels. The foundation's Web site has a listing of angel groups in the U.S. and Canada, with links to each group's Web site.

Golden Seeds LLC of Cos Cob, Conn., is one angel-investor group that looks specifically to provide funding for women entrepreneurs. Stephanie Hanbury-Brown, the company's founder and managing director, says angels generally look at companies with valuations of less than $4 million. Anything above that is more in the range of venture-capital investors, she says.

Ms. Hanbury-Brown says the group was formed because "women-owned businesses tend to get a smaller piece of the pie in terms of venture capital." She adds that women are still having trouble reaching and staying in top corporate positions, so she hopes that making this type of funding available will ultimately "help women create the sorts of companies that will help [them] get to the top and stay there."

Golden Seeds invests as much as $300,000 in a company, Ms. Hanbury-Brown says. And if the business needs more than that, the group will team with other angels to put together the necessary financing package. In return for the financing, the angel investors get an equity stake in the company and advise on how the company should be run.

Angel investors often connect with each other through professional alliances like Angel Capital Association of Vienna, Va. Golden Seeds says it relies on word-of-mouth and groups like Angel Capital Education Foundation to get applications. It also has received applications on its own Web site.

"Just by enabling [women] to think they can grow their business," says Ms. Hanbury-Brown, "it helps them succeed."

Write to Joanna L. Ossinger at Joanna.Ossinger@wsj.com