Despite the fact that women own 10.6 million businesses in the U.S. and represent 35 percent of startup business owners, they receive a piddling 4.2% of venture capital funding. This means women-owned companies tend to be smaller and grow more slowly than companies owned by men. MoolaHoop launched a crowdfunding platform for women entrepreneurs today to bridge this gap.
MoolaHoop is a rewards-based crowdfunding platform that specifically works with women-led businesses looking to raise capital. Selected businesses are featured on the site with a profile telling their story and a fundraising goal, along the lines of Kickstarter and Indiegogo. MoolaHoop aims to go beyond financial support, however, by creating a robust ecosystem — dubbed the “Hoop” — that helps women leverage their existing social and professional networks, as well as gain access to mentorship, education, and skill training.
“The economic impact that women-owned businesses represent is enormous,” the company said on its site. “MoolaHoop’s core mission is to improve access to capital for women entrepreneurs, helping them attract debt-free funding while building a strong base of supporters for their new venture.”
Crowdfunding sites have gained a tremendous amount of momentum over the past few years and Deloitte estimates that rewards-based crowdfunding will raise $700 million in 2013. Raising venture capital money works for some startups, but not for all. Entrepreneurs that have historically existed on the periphery of the tightly-knit VC network — like women, minorities, hardware companies, and people outside of tech hubs — are finding crowdfunding to be an effective alternative method of financing. Startups initially passed over by VC firms (like Pebble) have raised millions of dollars on Kickstarter and Indiegogo, and now a new wave of crowdfunding platforms is emerging to focus on specific groups or verticals.
MoolaHoop is not only focusing on women-led companies, but also those “doing good.” One of the first featured projects is a partnership between BlueAvocado and Open Arms to produce an eco-friendly collection of accessories made using reclaimed materials and sewed by female war survivors. Another project is by a company called LiveWordly, which is building a global marketplace for products handcrafted by women in the developing world. A portion of all sales is donated to a non-profit that supports education within that country.
“We want to make a difference in the world by creating cultural experiences for people here and giving back to the people and places where we are importing from,” LiveWorldly’s founder Kael Robinson told VentureBeat. “Right now we are trying to get money to employ 30 people in Kenya to make products for us to sell, and we will give a portion of the proceeds to a local school in one of Africa’s worst slums. But currently the way money is given out and investors decide to invest is not ideal.”
Robinson first started working on LiveWorldly five years ago after a trip to Brazil. The company has grown and now has a presence all over the world. Its campaign on MoolaHoop strives to raise $25,000 to get this new Kenyan collection off the ground, and invest in future projects.
MoolaHoop was founded by Brenda Bazan and Nancy Hayes. Both women spent years in executive roles at IBM and left to enter the non-profit world.