Progress made in boosting funding for female entrepreneurs but women still 'being snubbed by investors'

An annual report for the Investing in Women Code, which commits funders to increasing access to finance for women-led businesses, shows more investment is going to female entrepreneurs but they still seek and receive less money than men through all types of providers.

Set up in 2019, the code was recommended in the Rose Review of female entrepreneurship by NatWest chief executive Alison Rose.

The review released an update earlier this year which showed female business owners now account for a larger proportion of new company incorporations than ever before.

The Investing in Women Code sets out commitments to support women entrepreneurs by improving their access to the tools, resources and finance they need to achieve their goals.

There are currently 160 signatories including angel investment groups, venture and growth investors and High Street banks such as Barclays, NatWest and Santander.

Funding for female entrepreneurs

The new annual report showed that in 2021, 34% of venture capital deals made by code signatories were in companies with at least one female founder, compared to an industry average of 24%.

The proportion of deals concluded by code signatories with all-female founder teams rose to 9%, up from 6% in 2020 and compared to a benchmark of 7% for the market as a whole.

In addition, the average amount of early stage angel investment sought by all-female teams in 2021 was £791,000 which was similar to the £823,000 average for all-male teams. This report said this is “a significant and encouraging change from 2020, when all-female teams requested less than 50% of the amounts requested by male-only teams”.

In further analysis of angel investors signed up to the code, although only 17% of the total pitch decks received in 2021 were from women-only founder teams, they were more likely to be taken forward for further consideration.

The data showed 40% of all-female founder pitch decks were taken forward, compared to 30% for mixed gender and 29% for all male teams.

But despite the progress, Alison Rose wrote in the Telegraph that female entrepreneurs are "being snubbed by investors".

She said:

"This data highlights where more change needs to come and it tells a clear story. Across investors and lenders, female-led businesses consistently seek and receive less investment and lending than firms run by men."

The report showed that warm approaches to investors have a significant impact on success rates. Rose said more networking opportunities need to be provided to allow women to create relationships that lead to funding.

Commenting on the report, small business minister Paul Scully said:

"Growing the economy is the long-term way of addressing the cost of living and up to £250 billion could be added to the economy if we break the barriers to women starting and scaling new businesses at the same rate as men.

"Significant progress is being made but there will be more to do in the time ahead, so I’m looking forward to working with businesses to ensure all entrepreneurs are able to make the most of their talents and I encourage more lenders and investors to sign up to the code."

The government and Investing in Women Code partners have agreed three priorities:

• further increasing the number of code signatories, including by expanding the information available online for prospective signatories.

• showcasing the actions being adopted by signatories and promoting best practices to support women entrepreneurs, including holding forums to share best practices and engage with women-led businesses.

• refining data collection and analysis, including assessing what additional metrics to collect and further improving understanding of the finance market more widely and the challenges faced by women‑led businesses.

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