Last Updated Jan 25, 2011 7:45 PM EST
Do men and women approach startup funding differently?
I've been thinking about this question because over the last few months I've spoken at a couple of different business conferences where this exact issue came up. At the Perfect Business Summit in Las Vegas, I was the only female speaker, and at the Ladies Who Launch conference in NYC, I was one of many women. I went to panels on financing at both events and I kept hearing one point in particular: Women usually take it personally when they're rejected for funding.
I don't know if it's simply a stereotype or an actual fact, but I have to admit--it was true in my case.
I'd planned on funding YAS Fitness Centers myself when I opened in 2001. Unfortunately, the dot-com bubble burst right around that time and I was left flat broke. So I went to the bank and asked to borrow $400,000. They rejected the loan, stating I'd never owned a business before and my concept was new. In retrospect I understood the bank's position, but it still pissed me off. I almost yanked my account to go to another bank.
My next thought was a Small Business Administration (SBA) loan. I quickly learned that wasn't an option. The SBA loan process takes forever, if you can even get one. I'd already signed a lease. The clock was ticking.
So I did what many people do and turned to friends. But they all thought I was nuts trying to open a gym at 42 years old and no one would loan me money. Really? I couldn't even get my friends behind my idea? (Family wasn't a possibility because I grew up very poor.) I definitely "unfriended" a few people over that.
Then I got busy. When people tell me I can't do something, I have to prove them wrong.
I took out my credit cards, looked at my business plan to see where I could cut my budget, and I did bootstrapping -- on steroids. I fired my contractor and did the build-out of my first gym myself. Now, I have to say I understand why contractors get paid so much money. Doing the build-out myself and dealing with permitting was one of the harder things I've ever done. I had to move out of my house and into an apartment. I sold my car. I basically went back to living like I did in college, complete with the mac-and-cheese diet.
In retrospect, feeling personally rejected wasn't such a bad thing. Along the way, it forced me to keep refining and strengthening my pitch for my business. I became a better saleswoman. I could have become consumed with self pity. Instead, getting rejected motivated me to do everything necessary to get my business up and running. I knew I could do it; being forced to do so alone -- and not being beholden to anyone else -- gave me a huge amount of confidence.
Women, have you felt this way when you tried to start a company? Men, do you have a different view of financing your first business? I want to hear about it.