Ahead of International Women’s Day on 8 March, Judith Hartley, CEO of British Business Investments, comments on the need for more action to increase funding for female founders to scale up their businesses.
International Women’s Day is always a great opportunity to celebrate the amazing work that women across the UK undertake across a variety of different industries. It also acts as a trigger to remind us of the many barriers that still exist for female founders seeking to grow their business.
Scaling businesses, including those of female founders, often seek equity finance to fund their growth. In absolute terms, equity funding to female founder companies is increasing, which is good news. For example, in 2021, there were 161 equity deals worth £320m going to UK companies with all female founder teams. That’s an increase of more than 60% for both number of deals and investment value compared to five years earlier in 2017. However, if we look at these figures as a proportion of all equity deals over the same period, it’s a very different picture. We are still in the situation where for every £1 of equity investment in the UK in 2021, all-female founder teams received only 2p – which is roughly the same as 10 years ago. This is not good news and is a long-standing issue, just one of several barriers facing female founders looking to scale up their business.
I want to help address this issue and was therefore delighted to be appointed last summer to the Women-Led High Growth Enterprise Taskforce set up by the Cabinet Office and chaired by Anne Boden, CEO and Founder of Starling Bank. The purpose of the Taskforce is to examine the barriers facing female founded scale ups and to help drive the success of these businesses. The Taskforce meets quarterly and to date, has discussed a wide variety of topics relating to female founders looking to scale up, ranging from access to mentoring, role models and networks to skills, ambition and aspiration, regional perspectives and of course, access to finance.
Participating in the Taskforce is hugely inspiring, especially working alongside the other Taskforce members who are very passionate about this cause. I would like to especially mention my colleagues in the access to finance workstream – Alex Depledge (Founder and CEO at Resi); Check Warner (Co-founder and Partner at Ada Ventures and Diversity VC); June Angelides (venture capitalist and angel investor) and Sam Smith (Founder and former CEO of finnCap Group plc).
British Business Investments is also seeking to support female founders and other diverse groups. We have recently changed our mission to explicitly target diverse entrepreneurs, so that all entrepreneurs can access the finance they need regardless of where and who they are. To turn our words in to action, we have updated our investment strategy and due diligence processes to more explicitly favour proposals demonstrating strengths in these areas and particularly welcome such applicants. It is early days but we are determined to do more in this space.
At a Group level, the British Business Bank is also actively supporting female founders. The Bank is a founder signatory, alongside the BVCA and UKBAA, of the Investing in Women Code, which is committed to supporting the advancement of female entrepreneurship in the UK. The Code’s second annual report was published in June 2022 and announced 160 signatories, up from 93 in 2021, which is great progress. This number has since increased to 199. Whilst the report gave some promising signs of the real impact the Code signatories are having in driving female entrepreneurship, it also highlighted the continuing low proportions of funding both requested and received by women-led businesses and female founders.
We all know already that diversity is good for business. The initiatives I mention above are incredibly important, yet more can still be done. We all need to take every opportunity to highlight the issues faced by female founders and do what we can to bring about lasting positive change in this area.