FemTech week is officially here, so we’re taking it upon ourselves to celebrate and empower the incredible startups seeking to address the healthcare needs of women.
Seeing as only 4% of healthcare research and development (R&D) funding is directed at women’s wellbeing, we want to help FemTech founders harness the various fundraising methods available to them.
In this article we’ll be outlining the 4 ways in which FemTech startups can access the funds needed to grow their business.
Crowdfunding is essentially gaining a large community of supporters, who collectively invest in your startup venture with the aim of helping it achieve its growth potential.
In return for their support, those who back your business are offered a number of incentives such as; non-financial rewards; re-payment plus interest; or a portion of equity.
As of 2020, Fundly reported that crowdfunding has contributed a whopping $65 billion to the global economy in business revenue.
In the case of FemTech, rewards-based crowdfunding platform Indiegogo is home to an inclusive support community, with 47% of projects that exceed their funding goal being run by women.
Projects listed on Indiegogo can pursue either fixed or flexible funding. If your project has a funding goal set in stone, fixed funding may be your preferred route. But for campaigns that could benefit from raising any amount, flexible funding distributes capital regardless of whether the crowdfunding goal has been met.
2. Grant Funding
The UK boasts a generous grant funding system that provides commercially viable R&D projects with the financial means to get their business venture off the ground. If selected for a grant, the cash you receive is 100% guaranteed, totally non-repayable, and not at risk of diluting your corporate equity.
That’s guaranteed, free money, with no strings attached! With these game-changing benefits comes fierce competition, and today, more startups than ever before are trying their luck with the complex application process.
FemTech is a sector that’s hugely underfunded, despite being projected to reach the value of $60B by 2027, with a Compound Annual Growth Rate (CAGR) of 15.6%. It’s likely that an efficient FemTech grant proposal will stand-out from the crowd, and grant-awarding bodies may favour you over those pursuing oversaturated markets.
For FemTech startups who wish to take a more strategic route, a fantastic grant funding program aimed specifically at FemTech businesses is the FemTech + HealthTech Grants Program, which offers grant prizes from $5,000 - $15,000.
3. R&D Tax Credits
Whilst grant funding can support your FemTech future, R&D Tax Credits offer financial reward for innovation that’s already taken place.
R&D Tax Credits offer startups that have spent money on R&D the chance to claim back up to 27% of that capital, after their first financial year.*
This substantial proportion of cash can be a game-changing way to re-invest into the growth of your FemTech startup. It also doesn’t sacrifice any of your equity.
Most FemTech startups will benefit from the SME Scheme, which offers R&D tax relief to companies with less than 500 employees, less than $86M in gross assets and less than $100M in turnover.
Exceeding these metrics makes you eligible for the RDEC Scheme instead, which allows 13% of research & development costs to be reclaimed.
Founders don’t need to navigate the R&D Tax Claim process alone. Expert advisors are on hand to identify the scheme that’s right for you and even complete your claim, freeing you up time to continue scaling your business.
One way that you can really benefit from R&D Tax Credits is to make sure you don’t choose the wrong advisor to help file your claim.
Lots of R&D Tax Credit advisors charge hefty percentage-based fees, and try to justify it by drawing out the application process.
In reality, you can file at an affordable rate over the course of just a few days. R&D specialists at Claim Capital operate a £3,000 fixed fee and commit to sending off your application within 3-5 days.
4. Sector-specific Accelerator Schemes and VC firms
Partaking in Accelerator Schemes and approaching VC investors that have a passion for FemTech won’t guarantee you a cash injection, but they can really boost your chances of getting in front of the right people and gaining access to life-changing investment.
If you’re not familiar with Accelerators, they’re 3-6 month programs designed to catalyse the growth of early-stage businesses by providing a network of mentors to guide them towards demo day – where a group of specialised investors will receive your pitch.
A number of Accelerators focus solely on FemTech, meaning that experts in women’s wellbeing services dedicate themselves to helping your venture take-off, and investors that are hungry to back FemTech projects will be waiting to hear from you.
Here are the top five FemTech Accelerators, according to the 2021 FemTech Report:
Alternatively, here are the best VC investors that exclusively fund FemTech innovation:
The world of VC investment has been male dominated since the dawn of time. A report from 2019 showed that 83% of all UK VC firms have no women in their decision-making bodies at all, discouraging FemTech founders from entering a system that wasn’t built with them in mind.
But the above companies are beginning to change that. When it comes to elevating women’s healthcare, just know that there are programs and firms out there that want to hear from you!
*These are the updated figures in line with the new legislation announced in the April 2023 Spring Budget.