Posted: 22 / 07 / 2022
It is industry and world-wide recognised that women-led businesses face significant underinvestment.
The 2019 Rose Review of female entrepreneurship reported that if their potential was recognised, female founders could contribute an additional £250bn to the UK economy. So why hasn’t the gender-based investment gap been closed?
Female founders face a number of obstacles when it comes to accessing funding for their business strategies and these create a cycle of disadvantage, whereby the limited likelihood of women receiving investment results in fewer applying for it.
A number of statistics have been working against female founders:
- According to British Business Bank, for every £1 of venture capital invested in the UK, less than 1p is received by all-female founder teams. All-male founder teams receive 89p.
- 75% of Information Memorandums reaching investment firms are from all-male teams.
- Only 4% of investment committees consider all-female teams.
- Only 4% of successful venture capital deals are with all-female teams.
A positive trajectory
The UK government introduced the Investing in Women Code in 2019 as a commitment to improve the accessibility of funding resources for female business leaders. Since then, in 2021 the number of new businesses incorporated by female founders in the UK rose to 20% of incorporations, meaning more women than ever are building start-ups in the country.
Over 130 signatories with a combined investing power of around £1 trillion have now signed up for the Investing in Women Code, meaning their organisation should be held accountable for supporting equality, collating and publishing data concerning gender during interactions with entrepreneurs and improving processes in increase female business leaders’ access to resources.
Furthermore, the corporate finance industry is seeing an increase in women taking up private equity and venture capital roles, so decision makers in the space are starting to better reflect the variety of founders on the opposite side of the table.
Improving opportunities for women not only enhances economies but will also unlock a wealth of creative potential and help to ensure that industries aren’t evolving without the insight of half of the globe’s population.
I’m actively seeking more women leaders to work with, in order to defy and improve these statistics. We support some excellent female entrepreneurs across the full suite of Sedulo’s financial services, but specifically, when it comes to improving access to investment, we are keen to work with more women-led businesses on information memorandums and introductions to our vast network of Private Equity and Venture Capital contacts.