How can women raise money? Let us count the ways

WASHINGTON - Kavita Shukla started her company a few years ago at a farmers market with $300 dollars and an idea that had been ruminating since a middle school science project.

A decade later, her vision - a piece of paper infused with spices that would keep food fresh - is shipped to families and farmers in 35 countries.

FreshPaper - inspired by a home remedy given to Shukla by her grandmother - is knocking it out of the park.

"For such a long time, I was told I needed more money," she told a crowd of 250 rapt women (and a few men) Friday at The Washington Post's Women in Small Business live event. "I almost lost hope."

Indeed, money - and the difficulty women have borrowing and raising it - was the recurring theme among the audience and speakers that also included Small Business Administration (SBA) head Maria Contreras-Sweet, Georgetown Cupcake founders Katherine Kallinis Berman and Sophie Kallinis LaMontagne, Personal Independence Trust chair Nell Merlino, and Katherine Jollon Colsher, national Director of Goldman Sachs 10,000 Small Businesses

Before joining SBA, Contreras-Sweet founded three of her own small business, including a community bank in California and a private equity firm. She said her frustration with the banking systems is what led her to start her own. She would gather women and say to them, "You always tell me you're frustrated with our own institutions. We need to build ownership. So let's get together and build a bank of our own."

The Georgetown Cupcake sisters said no's and shut-doors were common when they started their first brick-and-mortar shop in 2008, a Georgetown suite smaller than their current Georgetown location.

"[Banks] were skeptical," said LaMontagne. "Most of the bankers we met with were male."

Shukla, whose company is called Fenugreen, filed for a patent when she was a senior in high school. Her goal was to get her paper to people in Africa and India who, like her grandmother, didn't have access to refrigeration.

That was when she started going to the farmers market. "Frankly, the money made a big difference. It funded our first production facility. It funded our ability to get into Whole Foods. It funded us getting out of my apartment," she said.

While cash flow and start up capital are integral for business owners everywhere regardless of gender, Merlino, who created Take Our Daughters to Work Day, says it's the biggest parity barrier for women business owners.

Most men get their initial money from friends and family, says Merlino. "I have been approached for years by women who say, I need money.' Who can't say that?"

She says women need to be familiar with a specific dialogue when asking for investments, and that "hoping and praying" for recognition is unrealistic.

"But more than anything, she says, "it's being clear about what you need the money for, how you're going to pay it back, how it's going to help you grow.

Colsher, national director of Goldman Sachs' 10,000 Small Businesses program, says emerging entrepreneurs can take on extremes. "Some think they want to be a $100 million business and don't know how to get there. Some think they're going to be a $150,000 business and that's their definition of success."

For LaMontagne and Berman, seven years of sweat equity and a few maxed-out credit cards later, their business now bakes over 8 million cupcakes a year. Today, they have expanded into six cities, and secured over 400 employees, two book deals and a television series.

Women-owned businesses account for only 4.4 percent - or $1 of ever $23 - of the total dollar value of loans from all sources, according to a July 2014 report by the Senate Committee on Small Business and Entrepreneurship.

"For small businesses, often times business owners pay themselves last," says LaMontagne. "They finance their growth through cash flow."

Contreras-Sweet says that's the nature of women. They will always give up their own cash flow to make sure their rent and employees are paid, she said. "We're nurturers."

When she first started as administrator, Sweet said she noticed that many women business owners lost their credit and were fastening low FICO scores. So, she said, they changed the rule for SBA loans to blend an applicant's personal FICO score with the business score that's been maintained.