Arion Long, CEO of Femly, a maker of eco-friendly personal care products, has discovered an effective approach to funding her business: the contest circuit.
Since founding her company in 2016, Long says she’s won about $800,000 from 37 different competitions that offer fellowships, grants and other support for small businesses. She was a Tory Burch Foundation Fellow in the 2019 cohort, a winner in the Mastercard & Bank of America “Grow Your Biz Contest” and a winner in the Beta City Venture Capital Pitch Competition, a local contest in Baltimore, where she is based.
Her secret? “I have a great business plan—and a high-profit business,” says Long, who sells sanitary pads to consumers by subscription and also runs a program to stock restrooms in schools, offices and other locations with free feminine products for those who can’t afford them.
Increased Opportunities for Entrepreneurs
While business plan and pitch competitions, fellowships, grants and similar funding sources have been part of the small business scene for decades, they’ve seen renewed importance in recent years.
Since early 2020, many organizations have stepped up to provide resources to entrepreneurs whose businesses were hit hard by the pandemic. Small business supporters have also jumped in to help close the funding gap for women and people of color, which has increasingly gotten attention. Only 2.3% of venture funding went to female-founded startups in 2020, according to Crunchbase, and less than 3% went to Black and Latinx founders.
For those on the hunt for cash, Long recommends signing up for Hello Alice and IFundWomen, which connect women to funding. She also suggests getting on the distribution list for local and state economic development organizations’ newsletters, which publish listings along with program deadlines.
“A lot of the funding opportunities come through these weekly and monthly email lists,” she says.
Networking Your Way to Success
Entrepreneur Elizabeth MacBride has used foundation money to fuel the growth of the Times of Entrepreneurship, her Alexandria, Va.-based publication for business founders and investors. To date, she’s received more than $300,000 from groups such as the Ewing Marion Kauffman Foundation and the Walton Family Foundation.
When targeting foundations, MacBride says to aim for a “warm introduction”—which is when you are introduced to someone by a mutual acquaintance. If you don’t have any foundation connections in your network, she recommends attending conferences to meet people who work in that area. Registration fees can be expensive, she notes, but the investment can pay off. “It was worth it for me,” she says.
Also make sure you have a professional in your network who can provide advice on whether any funding you receive is taxable. This way, you can set aside the money to cover what you might owe. A good accountant is “crucial,” says MacBride.
Value That Goes Beyond Money
In addition to funding, entrepreneurs can gain valuable resources such as introductions to other entrepreneurs and lenders, office space and business services such as bookkeeping, as well as mentoring from experienced businesspeople.
Karen Litzy, a Manhattan, N.Y-based physical therapist accepted into the Goldman Sachs 10,000 Small Businesses program, said that experience was akin to getting a “mini-MBA in entrepreneurship.” She estimates it would have cost her $50,000 to obtain a similar education elsewhere.
Litzy says she’s picked up new ideas from participants in other industries and, through the educational programming, shored up her understanding of business finances. With her revenue increasing, she’s now ready to start hiring employees. Says Litzy: “I’m no longer fearful of growth.”
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Elaine Pofeldt is an independent journalist who specializes in careers and entrepreneurship. She is the author of The Million-Dollar, One-Person Business, and her work has appeared in Fortune, Money, CNBC and more.