The secret to being a 'million-dollar woman'

These are the best of times and worst of times for women entrepreneurs.

Thanks to record-breaking levels of investment in start-ups, women potentially have access to millions in start-up capital in a way that was unthinkable one generation ago. And yet, according to a recent National Women's Business Council study, most women launch their businesses with less than half the amount of capital as their male counterparts, and a majority feel they lack the training and support they need to expand beyond sole-proprietary, low-grossing companies.

Only 3 percent of all women-run businesses make revenues of $1 million, while a majority of women are "solopreneurs" who have no employees and revenues below US$200,000. Women are also twice as likely as men to cite running out of cash as the main cause of shutting their doors. Why the gap?

Julia Pimsleur (seated left) with Double Digit Academy group
Source: Double Digit Academy
Julia Pimsleur (seated left) with Double Digit Academy group

When my business, Little Pim language learning for kids, passed the $1 million mark a few years ago, a journalist contacted me for an article about the handful of women whose businesses were making "high revenues." I was partly flattered but mainly stunned. Why are so few women running businesses that go beyond the proverbial kitchen table?

When I set out to raise venture capital (VC) for Little Pim, I discovered another surprising stat: Just 3 percent of VC dollars get invested in women-run businesses. Not only do most women start companies with far less capital that men do, but they make just 27 percent of the revenues of parallel male-owned businesses. Study after study has shown that higher start-up capital correlates to higher revenues.

To help pay it forward and start closing that gender gap, I decided to create a fund-raising boot camp for women. I wanted to encourage female entrepreneurs to learn how to access funds in the crucial growth stages of their business. Three years later, I am so proud of the 50 graduates of my academy who have raised a collective $10 million and are on their way to joining the million-dollar women ranks.

From my own experience with my company, having a one-year runway of cash and access to growth capital was critical to taking my company into the seven figures. Every entrepreneur makes mistakes, and having the capital to get through the dips before you find what works can make a fate-determining difference.

Women who want to get out and raise capital need just three things to be successful:

  1. The right mindset – That's the confidence to believe they can take their company big.
  2. The right skill set – They need to learn how to fund-raise, know which CEO skills they do and do not have, and hire or seek professional development for the missing pieces.
  3. Access to networks – Getting access to the right sets of funders, partners and mentors is necessary to scale up the business.

To achieve million-dollar plus revenues, most of the women I interviewed did raise money and they credit this with their ability to go big. They also credited three other advantages: they joined professional organizations which brought them CEO peers and mentorship, they had strong advisors and coaches and they had the confidence to own what they were good at and go fill in the gaps on the rest.

When women access wealth, research shows they invest in their communities, children's education and other female entrepreneurs. The ripple effect is tremendous. Investing time and capital into training and supporting women entrepreneurs produces more capital and global economic growth. When we have more "million-dollar women" we will see more jobs created and more work environments that allow for work-life balance and for women to live full lives as professionals, mothers, daughters and partners.

While raising capital does not guarantee women will achieve $1 million in revenues, having enough runway to make a few mistakes often does. Women globally who want to "go big" and who have the grit, domain expertise and smarts to do it deserve that chance, and we can support them through funding their ideas on crowd-funding sites, investing as angel investors and encouraging them to master the three things, mindset, skill set and networks.

Commentary by Julia Pimsleur, CEO and founder of Little Pim, a second language learning program for kids. After raising millions in angel and venture capital for her own company, she created "Double Digit Academy" and online course "Further. Faster. Funded." to help other women raise capital. She is the author of Million Dollar Women: The Essential Guide for Female Entrepreneurs Who Want to Go Big (Simon & Schuster - October 6, 2015).