By Amanda Steinberg
Ask any startup founder about the challenges they face, and you’ll hear similar responses: obtaining the funding they need to grow, and gaining access to professional networks with the right connections. Enter SheEO—the solution created by businesswoman Vicki Saunders to help female entrepreneurs overcome these exact challenges.
As the founder of five companies, one of which she took public, Saunders understands entrepreneurship. She has raised most types of capital, but believes that the traditional funding model is broken.
The Plan by Vicki Saunders
According to research commissioned by the National Women’s Business Council (NWBC), female entrepreneurs start companies with 50% less capital than male entrepreneurs. SheEO has a bold plan to transform how women-led startups receive funding with a new approach to crowdsourcing.
The SheEO model asks 1,000 women, known as ‘Activators’, to contribute $1,100 each to SheEO regional funds. Of this commitment, $1,000 (minus the credit card fee) goes directly into a pooled fund, and $100 goes to sustain SheEO. The pooled funds are then offered as individual loans to 10 female entrepreneurs, known as ‘Ventures’, at a zero-percent interest rate, which is paid back to SheEO over a five-year period.
All Ventures are coached monthly and start paying back their loans after three months—in 20 equal payments—over the five-year period. Every quarter, they report on their business impact, and the results are viewable online to the public. Once the money is paid back (SheEO has a goal of a 100 percent payback rate), new loans will be distributed.
In an inspiring twist Saunders calls “Radical Generosity”, the $1,100 provided by each Activator is a gift, not an investment. By 2020, the goal is to get a million women in regions all over the world to gift $1,100 dollars each, creating a billion dollars of perpetual capital.
How It Started
In the summer of 2013, Saunders ran an experimental cohort to pair aspiring SheEOs with existing female entrepreneurs in an incubation and mentoring program. The success of this experiment led to the formal incorporation of SheEO in 2014.
In the summer of 2015, 500 Canadian women joined together as SheEO’s founding Activators. They collectively raised $500,000 to fund five female entrepreneurs building new mindsets, new models, and new solutions for a better world.
Over 240 female entrepreneurs applied for funding in this first round. The final five Ventures were selected in a simple online process, with every Activator eligible to cast their vote as part of the selection committee. The initial five Ventures have already begun to see success from their association with SheEO. To date, these Ventures report an average growth rate of 30%, exceeding their targets.
Helping Businesses Grow
It doesn’t stop there: both Ventures and Activators receive multiple benefits from their participation with SheEO. Activators support one another, do business together, and also become each other’s suppliers, marketers, and advisors.
Nadia Hamilton, CEO of Mangusmode, an app that helps people on the autism spectrum live their lives with more independence, has acquired dozens of new corporate sponsors since her involvement with the SheEO network.
Activator Suzanne Biegel says that participating in SheEO has put her “in an active relationship” with fellow investors and entrepreneurs. Biegel loves that SheEO encourages Activators to put their ”financial, social and intellectual capital to work on behalf of Ventures, not just when you write your check but throughout the life of that relationship, in a way that’s fundamentally different” from traditional venture models.
From connections and introductions to coaching and membership, SheEO is growing into a community of radically generous women supporting one another to create a better world.
There are currently four active Radical Generosity regions, and SheEO welcomes both Ventures and Activators to join the movement. In addition to Canada, current active regions include Colorado, the San Francisco Bay Area, and Los Angeles. In 2017, SheEO plans to expand to many more cities globally, based on demand.
If you’re interested in becoming a Venture, note that the deadline for this round is quickly approaching. Visit the SheEO website by November 30, 2016, to learn more about how you can get involved. If you’re interested in becoming an Activator, please visit the SheEO website to get started.
The story “These women want to fund your business” first appeared on DailyWorth.com.