One of the advantages we have at AFIA DEI Index is being part of The Forum with its network of relationships with women entrepreneurs across the country. In October and November 2022, we leveraged this community to run three focus groups with BIPOC women entrepreneurs. We learned about their experiences in trying to access business funding and their advice to funders for improvement.

This is the second of two blogs about what we learned. 

Who participated?

Two-thirds of the participants were located in Eastern Canada, with the remainder distributed between Western and Atlantic Canada. 78% of the participants identified as BIPOC (36% as Black, 7% as Indigenous, 21% as East Asian, 15% as South or Southeast Asian). 

What advice do they have for funders?

We asked women entrepreneurs what advice they would give to funders to improve their experiences in applying for funding and increase their access to funding to grow their businesses. Here’s what they told us:

Venture Capital / Private Investors

• Many of our focus group participants commented on being invited to pitch to investors, only to learn afterward that they were never eligible for the funding in the first place. They recommend that investors commit to doing research about applicants' ventures prior to scheduling a pitch meeting, and be transparent about which business phase they are looking to invest in.
• Women also expressed seeing consistent positive bias towards male entrepreneurs that makes it more difficult for women to get funded. They are asked more 'negative questions' than men, focused on risks or potential problems with their businesses, rather than looking at the market opportunities or entrepreneur's vision. They asked that investors ask the same questions to all business owners and examine business potential with the same criteria. 
  
  

Supporting Organizations & Government

• Several participants stressed the need for more easily accessible grant funding, rather than more training programs. Entrepreneurs, especially solopreneurs, often don’t have the time to take the classes or webinars to receive grant funding. These grants are difficult to get when pre-grant workshops are required and people are disqualified if they don’t attend all sessions.
• Other grant requirements, like reimbursing expenses after the fact, two years of financial records, or requiring a certain number of employees, can also create barriers for start-up / early stage businesses. 
• BIPOC participants also emphasized the need for more consultation in the design of programs and funding opportunities targeted towards them, so that the programs respond to their needs and goals. One woman suggested that grants that allow them to hire external people for useful services such as website development, setting up their Shopify or Amazon account, accounting services, legal services would be much more helpful than grants to hire students for the summer. Another example was to provide entrepreneurs with grants that allow them to pursue business opportunities, such as the costs associated with conferences and trade shows where they have an opportunity to pitch to potential investors or customers.

Funders

• Applicants found greater success with funders that help guide them through the application process and take time to understand the business and person behind the application.
• Participants suggested that the personal information requested by financial institutions may need review for bias. For example, is marital status relevant for a loan application? Are the gender identity options and titles on application forms inclusive of gender diversity? 
• Another recommendation was to increase staff diversity so that the lived experiences of BIPOC women entrepreneurs are better recognized.
• Women also recommended that if they don’t qualify for a loan, it would be helpful to redirect them to appropriate resources or someone that can help achieve their goal. This would enable the appropriate funding to be allocated.
• Feedback on why an application is successful or rejected would make funders into partners or collaborators instead of gatekeepers in the entrepreneurial space.
• BIPOC women asked funders to look beyond a person’s personal credit score which can be based on many factors that have nothing to do with their business potential or financial management skills, and focus instead on the business numbers. 
• In the case of targeted funding (such as Black Entrepreneurship or Women's Entrepreneurship funds), there was a call for increased transparency about investment impact, such as reporting on if the funding is reaching the intended recipients and the impacts on these entrepreneurs and communities.

 
An insightful recommendation was for granting agencies and lenders to streamline application processes and requirements:

“What I would like to see is instead of us always applying multiple times for these things [financial institutions/funders], there should be someone who can collectively have our general applications and find the funders instead of us having to do it 90 times over. We have to tweak our applications for this funder, then that funder, etc. It’s too much time spent rewriting to fit your box, when there are people hearing that there are people with money who can’t find us.”

AFIA DEI Index was created to address these systemic barriers to financing for women entrepreneurs in all their diversity. By working with banks and other funders who are committed to change, we can shift culture, policies and practices to create equitable and positive experiences for women entrepreneurs and greater access to financial capital to grow their business ventures.