Alexa von Tobel took a huge gamble when she took a leave of absence from business school and invested all of her money into LearnVest, a site that provides financial management tools and advice, at the start of the recession. But it was a chance that paid off: LearnVest has since raised $72 million in funding.
So what were some of the lessons she’s learned in the five years since her company has launched?
1. Consider Whether It’s the Right Time to Take the Plunge
Starting a company requires time, money and expertise. Do you know enough about the field you’re interested in? Is there a course you should take or a skill you might need to learn first to ensure that your business is a success?2. Be Willing to Put Your Own Money on the Line
Investing your own money will make you even more focused. In December 2008, when people were hiding cash under their mattresses, I took a leap and invested most of what I had saved since college into starting LearnVest.
Of course, it’s important to first save up an emergency fund for at least nine months so that you’ll have your basic expenses under control should you get off to a rocky start. But putting your money on the line makes starting your own business personal.
Read on for von Tobel’s eight other pieces of great business insight on OPEN Forum.
Flickr user: Courtney Boyd Myers
“There’s a running joke that there are more single men in San Francisco and more single women in New York City,” says Lauren Kay, a co-founder and CEO of matchmaking startup Dating Ring. ”So we thought it would be fun if some of them met each other.”
The stunt—their business model doesn’t actually fly out singles on the regular—attracted a ton of attention and investment. Kay spoke to OPEN Forum about the Dating Ring and what it’s really like to be a woman entrepreneur raising funds.
What was it like to fundraise with Y Combinator and afterward?
It was really hard! Demo day with YC is insane—there are hundreds of investors on the floor. It felt like this weird speed dating event where you ask people for money. I was super uncomfortable.
After demo day, I was determined to land additional investment to grow Dating Ring, so I’d go on up to seven meetings per day with angel investors and VCs. Some of them were awesome. After 15 minutes, one investor offered us money because he believed in our vision right off the bat. But other investors would ask me out on dates or openly ask when men would be brought into the company. I had no idea the sexism in Silicon Valley was so bad.
What advice can you offer other female founders to get through it?
Look for investors who aren’t known to be sexist. Talk to other founders that you trust and only take meetings with VCs who have a track record of respecting women. Don’t put up with anything, and leave meetings if you’re uncomfortable.
Hiring too quickly is one of the biggest mistakes business owners make when trying to build their companies. Deepti Sharma Kapur, who started online food ordering service FoodtoEat in 2012, explains how her rush to build her team hurt her business:
"[I made the mistake of] hiring people who didn’t understand the company or the vision but were just looking for jobs. Now I’m mostly relying on references and talking to people in the industry. And the first question I ask is, ‘What do you know about the industry and our company?’"
Read on for 8 more common mistakes that can derail a business in its early days.
A D.C. lobbyist who was “obsessed” with fixing the infamous buttoned-shirt gap, Rochelle Behrens’ solution “The Shirt” became one of Oprah Winfrey’s favorite things. Behrens explains to OPEN Forum how she did it without a stitch of fashion or design experience.
I didn’t have a company. I only had an idea and a few shirts to sell. And I was doing this on the side. It was so early, but I wanted to see how the market would react. I’ve learned that a product is never going to be absolutely perfect, so you may as well test it out and see how it goes. A lot of products never go to market because they are always in the prototype phase.
I had this trunk show and—I have no idea how—it attracted the attention of NPR and they did a story on me. It was around the time that Hillary Clinton appeared on the Senate floor wearing a low-cut blouse and it caused a stir. I think my story line read something like, “Lobbyist-turned-designer livens up office looks.” It was good timing.
Read on to learn how Behrens’ shirts caught the attention of the Queen of Daytime Television.
You guys. 1,200 new businesses a day? That’s up from an average of 740 a day in 2013! This is just one of the many statistics that have us excited about the state of women entrepreneurs:
For more insights into the State of Women-Owned Businesses, read our report.