These Women Saved Up the Money to Fund Their Own Business—Here's How They Did It
Have you ever wondered how to turn your dreams of owning your own business into a reality? We can help. Each week, as part of our Self Made series, we showcase female entrepreneurs—as well as their quality, handmade goods—and share their best advice related to starting, maintaining, and growing your own business.
Admittedly, there's more to running a business than coming up with a million-dollar idea and finessing your founder's story. From securing a patent to establishing your supply chain, entrepreneurship is comprised of several, big behind-the-scenes moments. And since money doesn't grow on trees, it's important to have a cushion of cash to turn your business dreams into a reality.
Since less than three percent of women-led companies received funding from venture capital firms in 2020, female entrepreneurs are looking for new ways to get their big idea off the ground—and have the finances to do so. But, how? We interviewed five female entrepreneurs about how they saved for and financed their company and how you can do the same.
Abigail Cook Stone, Co-Founder and CEO of Otherland
Abigail Cook Stone has been obsessed with candles for years, but when she realized there were no high-quality candle brands that fit comfortably in her budget, she was eager to take matters into her own hands and launch Otherland. Since Stone was still a student when she had her "aha" moment, she applied for a small grant from her school for a couple thousand dollars for initial legal fees and candle-making supplies. "Being an entrepreneur is all about doing more with as little as possible, the virtue of scrappiness," she explains. "The amount of risk in a new business is as high as it can get. The constraint of having a small amount of available capital at the beginning can be a magical catalyst; you'll make different decisions, perhaps more sound business decisions, by starting small, and it will force your creative hustle."
In addition to saving a little bit of money from every paycheck she received, Stone also cut down costs by transforming her kitchen into a candle factory. "I bought some inexpensive supplies online, rolled up my sleeves, and got to work testing out different containers, fragrances, wax blends, and more," she shares. "Sarah Ribner, co-founder of PiperWai was my first customer!"
Part of saving up for your big idea is knowing how to allocate your money. For Stone, she spent the funds she did have on a graphic designer to help finesse her vision. "Once we had initial drafts of design for the brand and product, I pitched to angel investors who were much more receptive once they could visually understand the vision for the brand," she explains, noting that her small investment lit the proverbial match for the popular lifestyle brand.
Mo Mokone and Michelle Mokone, Co-Founders of Mo's Crib
For Mo Mokone and Michelle Mokone, launching their home décor company was a gradual process. As an avid needleworker, Mo loved to weave plastic bags into rugs; however, she never thought to pursue it as a business until 2016. "Michelle had let me know about a holiday market and pushed me to participate," recalls Mo. "The first product we sold was a beautiful origami swan made from paper. What we thought would be a slow sale became a phenomenon, selling out within days of the market. That's when we realized we were on to something."
The sisters balanced their budding business with their full-time corporate jobs before they took the leap of faith in 2019 to focus on Mo's Crib. "Once we decided to drop our corporate jobs and pursue the business full-time, we had saved up enough to last us through the early stages, but we were in for quite the surprise about how quickly that money ran out," explains Michelle. "As first-time entrepreneurs without a lot of guidance, we couldn't fully estimate the needs of the business while also supporting our own basic needs."
Fortunately, the Mokone sisters were able to get some help from family members and friends, which motivated them to consider other forms of revenue such as wholesale and partnerships. When they first launched Mo Crib, the sisters dedicate their time and money to the business, forgoing nights out with friends and vacations; ultimately, these small sacrifices paid off. Not only is Mo's Crib thriving, but the duo proudly adds that they are still 100 percent self-funded today.
Through it all, the sisters want budding entrepreneurs to know that mistakes and missteps are inevitable when running your own business. (Yes, even when it comes to your finances.) "Our financial struggles taught us a fundamental lesson about business, and that is 'progress before perfection,'" Mo shares. "Yes, it's important to go into business with savings and a solid plan; however, these are not easy to estimate perfectly—especially if you are new to the entrepreneurial journey. And, it's okay to make mistakes."
Heidi Zak, Co-Founder and CEO of ThirdLove
While ThirdLove might be the reigning champion of direct-to-consumer bras, its success story didn't happen overnight. After a frustrating experience buying a bra, co-founder and CEO Heidi Zak believed there was an easier way to shop for such an essential staple. Once Zak had the initial lightbulb moment, she and her husband-turned-co-founder spent nights after work, and weekends, researching the market, doing surveys, and building a business plan. Eventually, the duo left their corporate jobs to focus on ThirdLove full-time. But, fortunately for them, they got a head-start on their savings. "Start saving money early—well before you have the 'right' idea," she recommends. "That way when you're ready to take the plunge, you have money set aside at your disposal to get the company off the ground."
Zak and her husband spent six month bootstrapping their company before they decided to raise money for their budding business. "Funding a startup is never easy for anyone, but as a female-focused, direct-to-consumer company focused on lingerie, it was particularly difficult," she shares. "Many male investors didn't have much interest in our business because they didn't understand the need for a better bra, nor had they had the first-hand experience of an uncomfortable fit that far too many women are familiar with."
After many pitches—and many rejections—ThirdLove finally received funding for its Seed Series round. The rest, you can say, was underwired history.
Ariel Kaye, Founder of Parachute
Even when she was working in advertising and brand development, Ariel Kaye was a super-consumer of home goods, yet she always struggled to find bedding that fit her preferences and price point. Naturally, her own frustration inspired her to launch Parachute, a direct-to-consumer bedding and home goods brand. One of the first things Kaye did when she decided to launch Parachute was talk to investors. After all, how hard could funding a big business be? "When I started talking to investors, I was told that I was pitching them too soon; they wanted to see more progress before investing," she shares. "This posed an interesting challenge: how do you show more progress in a capital- and inventory-intense business without funding?"
Kaye leaned on her community and joined a Santa Monica-based accelerator called Launchpad, which helped her navigate the entrepreneurial roller coaster and, yes, secure some funding. As her story proves, saving contact information can be just as important as what's in your savings. "Talk to everyone," Kaye shares. "You never know who is going to point you in the right direction to help you achieve your goal. Ask questions, seek out a network of other entrepreneurs who are a bit further down the process from where you are to learn from their experiences. You have to be your own biggest advocate and be relentless in your determination; get out of your comfort zone."
Lindsey Johnson and Liz Eichholz, Co-Founders of Weezie
Shortly after Liz Eichholz got married, she was on the hunt for some new towels, but what should've been an easy, joyful shopping trip quickly became anything but: the jargon was confusing, quality was unpredictable, and embroidery options were archaic. So, she turned to her friend Lindsey Johnson, who was an MBA candidate at Columbia Business School. Together, the laid the groundwork for a more streamlined shopping process and eventually launched Weezie in 2018. While funding might be the entrepreneurial golden goose, the duo actively decided to stray away from the status quo. "We deliberately chose not to raise outside capital at the onset of the business, instead opting to bootstrap the business with our savings for as long as possible," Johnson explains. "We felt it was important to establish product-market fit and business viability before bringing in outside investors, and because we had both worked in New York for almost a decade prior we could afford to do so."
One year into business, they approached a small group of family, friends, and high-worth individuals to raise a small Seed Series. Today, Johnson shares that Weezie is a profitable business that still has no immediate plans to formally fundraise. "There really is no one size fits all approach to financing or fundraising," she adds. "You know your business and financial situation best! What makes sense for a competitor or peer might not be best for your company or you personally. Don't feel as if you have to stick to a certain way of 'doing things' just because it's been done that way before. "
- Val Fishbain's Nut Butter Brand Name, Spread the Love Foods, Perfectly Conveys Her Perspective on Giving Back
- Erin Wilkins, Founder of Herb Folk, Shares How Her Heritage and Drive to Help Others Fuels Her Small Business
- Beauty Entrepreneur Courtney Adeleye's Latest Venture Will Jumpstart Your Morning
- Meet Five Women Who Founded Their Own Businesses After They Turned 50