An angel investment is the opposite of a venture capital investment. An angel investor is someone who has a lot of money and who wants to provide funding to your business to help you get it off the ground. Often, an angel investor is someone you know and have an existing relationship with. There are standards for angel investors set by the Securities Exchange Commission (SEC). (Source)
Your capital refers to your money and assets. Let’s say you have $1000 in earnings from your business, plus you have equipment worth $200. Your total capital will be $1200. Knowing how much capital you have is helpful for when you want to plan your budget, create a forecast or growth strategy for your business, or apply for a loan. (Source)
Community development financial institutions
Community development financial institutions (also known as CDFIs) are private companies that make loans to low income or marginalized people who want to start or grow a business in the United States. Their focus is on making sure that people who might not be able to access bank loans can get the funding they need for their small business. While they do make a profit, their primary goal is usually community development.
Crowdfunding means asking your network to contribute money to your business or cause. You can crowdfund using an online platform, or simply by asking people you know for contribution. You are not expected to pay this money back, but crowdfunding often has more success when you tell a compelling story about what you plan to do, and offer something in exchange for support. For example, you could let people know that if they make a $100 contribution, you will write them a personal thank you note, or give them a free t-shirt. Although women face barriers to getting business loans, crowdfunding is where women have an edge. (Source)
When people talk about forecasting, they are talking about predicting the future. A forecast for your business might evaluate things like how many items you expect to sell in the next year, which would then help you decide how many supplies you need. Your forecast might also account for things like political or social changes that might affect your business. (Source)
Limited Liability Company (LLC)
A Limited Liability Company, or an LLC, is one kind of way to set up your business. It has specific tax implications and regulations, much like a partnership or a sole proprietorship. (Source)
A mentor is someone who helps you navigate business ownership, and who can provide guidance, advice, tips and connections as your business launches or grows. Mentorship has a gender component: research shows that men are often reluctant to champion the work of women in professional settings. (Source).
A microloan is what it sounds like: a small amount of money that is usually offered at a lower interest rate than a bigger loan. This amount can be a few hundred dollars, or a few thousand. It can be difficult to get a microloan from a bank, but there are “microlenders” who offer these kinds of loans to small businesses (see the funding section for more information). Getting a microloan (and then paying it back on time) can help you build your credit, and after you successfully pay back your microloan, you may be eligible for a bigger loan.
Networking means meeting different kinds of people who can provide information, connections and open doors for you and your business. Networking can be a barrier for women business owners; men tend to have more powerful professional networks than women when they are staring out (Source). But that doesn’t have to be the case! By meeting people online and offline and sharing your story and your passion for business, you can also build a robust network.
A partnership means that you are in business with someone else (or many others). This is an important term to know when it comes time to register your business or do your taxes, because it means you will have different forms and different ways of counting your income and losses. (Source)
Risk is part of starting any business. Taking risks is important, but it’s also important to know how much risk to take. Many business owners talk about taking “calculated risks”; that means understanding the risk and planning for potential setbacks if things go wrong. Recent research found that women are much less likely to have plans in place for business growth (Source), which is a good reminder to use the resources on this platform to make those projections, assess the risks, and plan accordingly.
Sole Proprietorship is a term you may see when it comes time to register your business or do your taxes. It basically means that you are your business, and your business is not considered a seperate legal entity. Whatever money your business makes or loses is considered as your personal income’s gains and losses. (Source)
Venture Capital (VC) refers to money that a person, bank or company invests in a new business. When people talk about Venture Capital, they are often talking about a lot of money, and a high risk (and potentially high gain) investment. These investments usually come with a stake (known as equity) in the company, which means the investors also get to make decisions. In 2016, less than 5% of VC was invested in women-led companies. (Source)