EMBARGO LIFTS 0001 THURSDAY 2 NOVEMBER 2023
GENDER FUNDING GAP BETWEEN MALE AND FEMALE ENTREPRENEURS REMAINS VAST, NEW REPORT FINDS
Beauhurst data reveals only 3.5% of equity investment for H1 2023 went to female-led businesses, compared to 85% going to male-led firms
The Entrepreneurs Network think tank, in partnership with Barclays, makes five proposals for Government to ensure progress on supporting female entrepreneurs continues
Rt Hon Caroline Nokes MP: “More work is required if we’re to maximise the entrepreneurial potential of women in Britain.”
London, 2 November 2023 – Despite the number of women starting businesses in the UK rising to record levels, female-led startups continue to receive just a fraction of the equity investment male-led companies do, according to a new report published today by The Entrepreneurs Network in partnership with Barclays.
Accelerate to Excel, the latest annual report from the Female Founders Forum, reveals new Beauhurst data which shows 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 somewhat more balanced, but female-led startups still comprise just 10% of the total amount, compared to 75% involving male-led startups, and 15% involving startups co-led by women and men.
The report examines a number of reasons for why the gender funding gap exists – including investor biases, inequalities in networking, cultural misperceptions about female founders, and childcare responsibilities. Off the back of these, it puts forward policy recommendations for how to tackle these obstacles – from suggesting 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. For the private sector, the report urges more of the financial sector to sign up to the Investing in Women’s Code – a voluntary initiative which promotes female entrepreneurship – and encourages investors to consider how biases might disadvantage female founders when pitching for funding.
The report was endorsed with a foreword from the Rt Hon Caroline Nokes MP, Chair of the Women and Equalities Committee, who said: “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 maximise 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 realise 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.”
The Female Founders Forum was established in 2016 as a joint initiative by The Entrepreneurs Network and Barclays. It comprises of over 100 of the UK’s most successful female entrepreneurs, including Laura Tenison MBE (Founder, JoJo Maman Bebe), Tamara Lohan MBE (Founder and CEO, Mr & Mrs Smith), Sara Murray OBE (Founder, Buddi) and Justine Roberts CBE (CEO and Founder, Mumsnet). It aims to celebrate and showcase female entrepreneurs, and campaigns to tackle obstacles and challenges they face when it comes to starting and growing a business.
Endorsement for the report:
Rt Hon Caroline Nokes MP, Chair, Women and Equalities Committee: “In addition to diagnosing the various problems that confront women entrepreneurs, the Female Founders Forum has also contributed constructively to the policy debate, offering practical solutions that will ultimately help move us towards a more equal future. It’s because of invaluable efforts like these that we are seeing progress – such as the record number of women who became entrepreneurs in 2022, or the fact that female-led businesses now represent one fifth of all UK firms (up from one sixth in 2018).”
Quotes from the report:
Deirdre McGettrick, CEO and Co-Founder, ufurnish.com: “Many investors assume women are “going to be weaker than male peers.”
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.”
Justine Roberts CBE, CEO and Founder, 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.”
Whitney Bromberg Hawkings, Founder and CEO, FLOWERBX: “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. [...] For those women without access to affluent people, I cannot imagine how they would access funds for growth.”
Jordan Brompton, Co-Founder, myenergi: “Finance equality shouldn’t be something that we have to talk about in 2023, but unfortunately it is.”
Elsie Rutterford, Founder, BYBI: “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.”
Notes to editor
You can read Accelerate to Excel in full here. It will be launched by the Rt Hon Caroline Nokes MP in front of an audience of 150 female entrepreneurs in the House of Lords on 2 November at 15.30-17.00. Please contact events@tenentrepreneurs.org to confirm your place.
You can learn more about the Female Founders Forum, and read all of its previous publications, here.
The research was kindly supported by Barclays.
Spokespeople from both The Entrepreneurs Network and Barclays are available for interview. Please contact Eamonn Ives, Head of Research at The Entrepreneurs Network, at 07506043997 to discuss.
About The Female Founders Forum
The Female Founders Forum is a project co-created by The Entrepreneurs Network and Barclays in 2016. It was set up to encourage, support and promote female entrepreneurship – and has published several reports on various topics to do with female entrepreneurship, which can be found here. The Female Founders Forum has over 100 members, all of whom are female entrepreneurs.
About The Entrepreneurs Network
The Entrepreneurs Network is a think tank for Britain’s most ambitious entrepreneurs. We bridge the gap between entrepreneurs and policymakers, with the aim of making Britain the best place in the world to start and grow a business. We have a network of over 10,000 entrepreneurs and are the Secretariat of the All-Party Parliamentary Group for Entrepreneurship, which sits across the House of Commons and House of Lords.
About Barclays
Barclays is a British universal bank. We are diversified by business, by different types of customer and client, and geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group. To find out more about how Barclays can support you and your business search Barclays women in business.
About Beauhurst
The data we used to calculate the gender funding gap was supplied by Beauhurst, a data platform that provides research and insight on the UK’s high growth companies. Its data allows professionals to discover and track Britain’s most ambitious businesses in unrivalled detail. For more information, visit beauhurst.com.