How Women in Food Get Funded
June 3, 2020

How Women in Food Get Funded

Business Models, Raising Capital

Today, there are 12.3 million women-owned businesses in the U.S., compared to about 400,000 in 1972. That’s major progress, as female entrepreneurs are proving over and over again that they are just as capable as men, if not more, at starting, scaling, and succeeding with their own ventures. This is especially apparent in the food and beverage world, with women launching some of the most innovative, iconic brands in the nation.

And yet despite female founders’ proven track record, they still encounter many challenges that their male counterparts do not. Perhaps most notably, women have a harder time securing investment in their companies. In 2019, venture-capital investment in all-female founding teams hit a record high of $3.3 billion. That’s great news, for sure, but that $3.3 billion accounted for only 2.8% of all capital invested across startups in the U.S. Even though that’s an increase from 2.2% in 2018, it’s clear that we have a long way to go to make venture capital investments more equal.

Part of the problem is that, despite recent pushes toward diversity and inclusion, venture capital is still an old boys’ club. According to Axios, less than 10% of the decision-makers at venture capital firms in the U.S. are women. But even outside of the VC world, other types of investment firms and organizations also lack women in top roles. Corporate boards in the U.S. remain male-dominated too.

However, as Tera and Rachael Young, founder of beverage brand YAYAYA, discuss in the latest Edible-Alpha® podcast, the lack of diversity at the top isn’t just because men aren’t allowing women a seat at the investors’ table. Many women who could be stepping up to fund not just female food entrepreneurs but any food businesses haven’t traditionally done so.

But enough about the problem. Let’s talk about solutions. For one thing, while change may be slow, it is happening. As Rachael tells Tera, she’s started to see a shift in more men recognizing and acknowledging that female founders indeed face greater challenges securing capital—and wanting to take an active role in changing that.

But regardless of the investment climate that female entrepreneurs enter into, they can do a lot on their own accord to increase their likelihood of securing capital. Knowing the hurdles they’re up against, women may have to work even harder to become even better prepared to ask for money than the average male founder does. Gaining financial literacy is not easy—it takes time and effort—but it’s imperative.

When an entrepreneur, no matter what gender, knows their numbers, their strategy and how much money they’ll need to accomplish their goals—and can present this information with confidence—they stand a much better chance of landing the financing they desire. Sometimes, because of long-held gender expectations, women need to give themselves permission to have that confidence in money-related matters, to drive the bus on business strategy, and to steer the course of conversations.

Fortunately, today, there are resources to help female food entrepreneurs gain financial literacy and get to a place where they are truly ready to tackle the tricky investment landscape. This is a big reason why Tera founded FFI, and we’re always here to assist new food and farm business owners of any gender get on a winning path.

And now, our roundup of the best food and beverage finance news, events, and resources from around the web… Consultant With TabletBusiness Model Insights

Raising CapitalRaising Capital

National Wholesale BrandsCPG/National Brands

Grocery Store Produce Section Market Trends

Regenerative AgricultureFarming and AgTech

Mergers And AcquisitionsDeals/M&A

COVID-19-Related Resources for Food and Ag Businesses 

Edible-Alpha® Huddles for consultants and entrepreneurs. View our previous week’s huddle notes.