Raising capital is key to the success of a startup. With sufficient funds, a business can meet its obligations to customers, employees, and suppliers and take the necessary steps to innovate its offerings.
However, raising capital is not easy, especially for female founders.
Even though there were close to 13 million women-owned businesses in the US in 2019 that generated $1.85 trillion in revenue, female founders struggle to raise capital for their startup.
A recent study by PitchBook found that only 2.4% of venture capital funds went to startups founded solely by women in 2021.
Image via PitchBook
With very little financing coming in through venture capital funds, women-owned startups need to find other funding sources such as business grants.
This article explores the different grants that are available to women-owned startups.
What is a Business Grant?
A business grant is a form of finance provided by governments and nonprofits to enable startup development.
Grants differ from other forms of startup financing in that you don’t have to pay them back or give up equity in your business to receive them.
This makes business grants perfect for cash-strapped women-owned startups since they basically offer money that can help founders fund their operations without the need to make repayments.
While grant money is a desirable source of funding for women-owned startups, they are difficult to qualify for because they come with tough requirements.
The eligibility criteria for business grants vary but often they consider the following things:
- The size of the business
- The sector the startup operates in
- The intended purpose of the grant funds
- Whether the startup is legally registered to operate in a particular location
To ensure you are not disqualified from a business grant due to lack of registration, read this detailed review of Incfile by GovDocFiling to learn how you can simplify the process of forming your startup in your state of choice.
Let’s now take a look at the top grants for women-owned startups.
1. Amber Grant
Named after 19-year-old Amber Wighahl who passed away before realizing her entrepreneurial dream, the Amber Grant is our top pick among the best grants for women-owned startups.
Image via Amber Grant
The grant is managed by an organization called WomensNet and every month they award a grant of $10,000 to a woman-led startup in a specific category to help them fund their operations.
Besides the business grant, the organization also has a quarterly grant of $10,000 for startups and nonprofits.
And if that’s not enough, the organization also awards an additional grant of $25,000 to two of the 12 monthly winners.
To receive the additional funding, the general grant winners must demonstrate significant growth and community impact to warrant additional funding for their startups.
The application process for the Amber Grant is very simple. Women-owned startups must describe what they do and specify what they will do with the grant.
The Amber Grant committee then selects the winner based on the strength of their business idea and the potential impact of the business grant.
2. Fearless Strivers Grant
Image via Fearless Fund
The Fearless Fund has collaborated with the Mastercard Foundation to run a grant contest that provides Black women with grants to start and grow their startups.
Winners of the Fearless Strivers Grant Contest also receive business mentorship and digital tools to help them promote their startups online.
And just like the Amber Grant, the Fearless Grant also awards a grant of $10,000 to successful women-owned startups.
The fund has a national grant contest that’s open to participants from all over the country. They also have location-specific grant contests in the following cities:
- Alabama
- Atlanta
- Birmingham
- Dayton
- Los Angeles
- New York City
- New Orleans
- Ohio
- St. Louis
To qualify for this grant, companies must be registered in the US, have no more than 50 employees, and should have generated $3 million or less in the past year.
3. The GirlBoss Foundation Grant
The other grant for women-owned startups we would like to bring to your attention is the GirlBoss Foundation Grant.
This grant is for creative women entrepreneurs. To qualify for funding, your company should operate in the arts, design, fashion, or music industries.
Women-owned startups that are selected for this award receive a $15,000 grant for their creative enterprises. The winners also receive marketing support from GirlBoss.com to help them take their businesses to the next level.
4. Cartier Women’s Initiative Awards
Image via Cartier Women’s Initiative
Founded in 2006, the Cartier Women’s Initiative Awards is an annual program that empowers women entrepreneurs by providing them with business grants.
The initiative runs awards in nine different regions around the world and awards the top three participants with grants to grow their companies. These regions are:
- Latin America and The Caribbean
- North America
- Europe
- Francophone sub-saharan Africa
- Anglophone and Lusophone Africa
- Middle East and North Africa
- East Asia
- South Asia and East Asia
- Oceania
The women-owned startups that are awarded the grant focus on a range of social and economic issues that positively impact the community.
The first, second, and third-place women-owned startups win a grant of $100,000, $60,000, and $30,000 respectively. Winners also get the opportunity to attend workshops and receive mentorship from business experts.
Conclusion
Women-owned startups face many challenges that make it difficult for them to scale their enterprises, key among them is the lack of enough business capital. Business grants stand out as a viable source of funding for such businesses.
To qualify for a grant fund, ensure to read the grant requirements keenly and deliver a convincing proposal that shows the impact the grant will have on your company and community.
So, go ahead and start applying for these grants.
Author Bio:
Brett Shapiro is a co-owner of GovDocFiling, a simple resource center that takes care of the mundane, yet critical, formation documentation for any new business entity.