Most people need at least $1,000 to $5,000 to start a small business, and asking people for money can be pretty awkward. At the Cut’s How I Get It Done Day on Monday, March 4, at a panel sponsored by Amazon Handmade, moderator and Cut columnist Charlotte Cowles asked a question that budding entrepreneurs can feel uncomfortable bringing up: How do you actually raise money to start a company? Do you just make a list of all of the rich people you know? (And what if you don’t know any?)
Cowles interviewed Sierra Tishgart, a former New York Magazine editor and the co-founder of the stylish cookware line Great Jones, and Jenn Tardif, whose company 3rd Ritual makes spiritually minded wellness products. The two women funded their companies very differently with similar success: Great Jones’s signature “Small Fry” pan sold out the day the company launched, as did 3rd Ritual’s first product, the BEL candle holder.
Tardif said she “bootstrapped” her business with money she’d saved, and was able to fund her earliest products by taking preorders. Meanwhile, Tishgart acknowledged that asking for money is often “rooted in privilege” and highly dependent on “who you know and who your friends and families are.” She and her business partner were able to secure funding from friends and family first.
“At first, I was worried about awkwardness, but then I realized you just have to go for it, and ask the people you know,” Tishgart said. “Instead of seeing it as asking for a favor, you have to think of it as giving someone a great opportunity. You have to have the confidence in your business that it’s going to give them a great return on their investment.”
Tardif, on the other hand, accepted slower growth to work with what she had. She said a friend helped her focus on long-term strategies to maintain a steady, positive trajectory for her business. “She told me not to focus on the starting point [of my company], but instead to look at what I wanted it to be in the future, and get really granular: About five years from now, what does the day-to-day look like? What do I want to be doing?”
One helpful resource is New York City’s crowdfunding initiative for women business owners called We Fund: Crowd. Through the program, any woman in New York can apply for a loan of up to $10,000 on this Kiva crowdfunding page.