Female-led founders in the UK continue to receive just a fraction of the equity investment male-led founders do, according to the latest report of the Female Founders Forum – a project of The Entrepreneurs Network and Barclays.
Accelerate to Excel, the latest annual report from the Female Founders Forum, reveals the latest to Beauhurst data for 2023, showing that just 3.5% of equity investment for the first half of 2023 went to female-led businesses, while 85.1% went to male-led firms, and 11.4% went to startups co-led by women and men. In terms of the number of deals being agreed, the picture is a little better, but female-led startups still comprise just 10% of the total number, compared to 75% involving male-led startups, and 15% involving startups co-led by women and men.
Over the years, the Female Founders Forum has taken a research-led approach to tackling these problems through policies and practical efforts. Perhaps unsurprisingly, our findings matches the experience of female founders on the ground, running some of the UK’s most successful companies.
“As a female founder that has raised quite a bit of money to fund growth, I can say that there is a serious lack of venture money available to female founders,” says Whitney Bromberg Hawkings, founder and CEO, FLOWERBX. “For those women without access to affluent people, I cannot imagine how they would access funds for growth,” she adds. “Many investors assume women are “going to be weaker than male peers,” explains Deirdre McGettrick, co-founder and CEO, ufurnish.com. Jordan Brompton, Co-Founder, myenergi says: “Finance equality shouldn’t be something that we have to talk about in 2023, but unfortunately it is.”
Elsie Rutterford, founder of BYBI highlights the importance of mentoring: “With the percentage of female founders or leaders being lower than men, it can mean finding female mentors or advisors can be tricky as the pool is simply smaller. That smaller volume of role models also impacts your belief of a female that founding and exiting a startup successfully is doable.”
Childcare costs also feature high. Sarah Hesz, co-founder, Bubble: “Childcare is part of the invisible infrastructure that is vital for every business to thrive, but for many founders it presents a huge barrier – financially, emotionally and logistically. UK childcare is expensive and inflexible, forcing female founders to make very tough career choices.” For Justine Roberts CBE, founder and CEO of Mumsnet: “In the next five years I’d like to see a massive improvement in the UK’s childcare system so that entrepreneurs who are also mums aren’t forced out of work by the expense of childcare.”
The report puts forward a number of policy recommendations – from suggesting the government more rigorously evaluates interventions to support female entrepreneurs to ensure they are delivering effectively, to going further to make childcare less expensive, the high cost of which often prevents women from returning to work or starting a business after giving birth.
The report was endorsed with a foreword from the Rt Hon Caroline Nokes MP, Chair of the Women and Equalities Committee, who wrote: “As The Entrepreneurs Network and Barclays have tirelessly shown over the years since setting up the Female Founders Forum, women in particular face a host of unique challenges when it comes to enterprise. At just about every turn, female entrepreneurs experience obstacles that their male counterparts do not have to deal with – whether that’s when they’re raising investment or simply being taken seriously in business.”
She also added that: “More work is required if we’re to maximize the entrepreneurial potential of women in Britain. The reward on offer is huge, with the Treasury itself estimating that up to £250 billion of new value could be added to the British economy if women in the UK started and scaled new businesses at the same rate as men do. To unlock that prize, we cannot sit idly by. As politicians, we need to ensure that policies are fit for purpose, and reform them when they’re not. We must work harder to close the gender funding gap, incentivise more women to become investors and put more resources into entrepreneurship education. In the private sector, business leaders and investors need to give women entrepreneurs a fairer hearing.”
Commenting on the launch of the report, Juliet Gouldman, Director, Business Banking at Barclays, said: “At Barclays, we want to be a partner for growth and help all women in business realize their ambitions. It is immensely rewarding to see the positive progress made from the concerted efforts across the financial services industry, education institutions and government to lower the barriers to female entrepreneurialism. However, the systemic issues identified will not be resolved overnight, so an ongoing determination will be required if we are to achieve lasting change.”
To that end, Barclays Eagle Labs and AccelerateHER are launching an accelerator for female founders that is open for places until 24 November 2023. Over nine weeks It will support 100 innovative, female-led technology businesses, and see founders work with experts from across the entrepreneurial landscape in a series of masterclasses, with the focus on developing their business propositions further.
The equity funding gap won’t be closed by one accelerator, nor will it be solved by one report or policy change. But each and every action – practical and political – can be a step in the right direction. Just ask the members of the Female Founders Forum, who against the odds have raised millions.
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