Catherine Merritt doesn’t mince words in discussing the challenges of running a startup.
“It’s like childbirth,” she said. “Nobody wants to know what it’s actually like beforehand because they wouldn’t actually go through it.”
“But it’s so worth it,” she hastened to add.
Merritt founded MUMZY, a crowdfunding platform for and by moms, in large part as an attempt to recognize and address the fact that mothers face unique challenges in the startup world.
A report released by the Kauffman Foundation this May found that irregular hours and a lack of support so common in startup culture strike working mothers particularly hard. Moreover, the average woman-led business starts off with only $75,000 in funding, compared with $135,000 for businesses led by men.
These and other factors end up discouraging women from starting their own businesses: 40.6 percent of new entrepreneurs in 2015 were women, down from 43.7 percent in 1996.
The catch-22 of funding
Merritt ran MUMZY for nearly two years while juggling a full-time job and the responsibilities of raising two young children. But a few months ago she said she came to the realization that there simply weren’t enough hours in the day to keep up with all of the competing demands.
She ultimately made the difficult decision to focus on her full-time job and let someone else take the helm of her burgeoning startup.
While it's hard to parse out the impact any single factor has on a particular company's fate, Merritt's story may serve to illustrate one of the challenges faced by parents seeking funding for their ventures: the competing demands of work and family life can make fundraising difficult.
Beyond the direct impact family life has on a parent's free time, having dependents makes it harder for a founder to forgo the steady paycheck and spend their work hours on their venture. This leaves many founders with children in something of a catch-22: unable to put in the time required to raise funding because of a full-time day job, but also unable to quit that full-time job without enough funding to pay themselves.
“We tried to raise, but I did not have the time or resources to meet with 50 investors and go through that process," said Merritt. "And this is ironic, because these are the challenges that moms face — I’ve got two little kids and we have a house, and there are other responsibilities that I have to tend to.”
Does crowdfunding hold promise for female founders?
Research conducted by Kauffman and the Hebrew University of Jerusalem has found that crowdfunding platforms like MUMZY hold promise in leveling out some of the funding gap between male and female founders. Specifically, the study found that Kickstarter campaigns led by women were successful in reaching their funding goals 69.5 percent of the time, compared with men’s success rate of 61.4 percent. A successful crowdfunding campaign in turn helps female founders raise funds from more traditional investors, argued Forbes contributor Geri Stengel, by proving the existence of a market for their products.
When Merritt came to the realization that something had to give, her first instinct was to ensure the project could go on. Having received feedback from multiple parties interested in taking over the company, Merritt said she is open to staying on in an advisory role.
Despite the obstacles she faced as an entrepreneur, Merritt said the experience has taught her valuable lessons that can be applied to any line of work. Last October she was named a senior vice president of the global PR firm MSLGROUP, and she attributes the promotion in large part to the personal and professional development derived from running a company of her own.
Describing it as the MBA she wanted to go back for, Merritt said the most valuable part of the experience was the opportunity to learn from her own mistakes and missteps.
“It’s empowered me tremendously to realize that changing and failure and making missteps are actually what pushes you further in the long run,” she said. “I was a very risk-averse person, and MUMZY really forced me into these situations of being out of my comfort zone. I am so grateful for that.”
Merritt said she is looking forward to drawing on the lessons she learned running MUMZY as she advises other companies in her newfound agency role.
Images via Catherine Merritt and MUMZY.