0.8% of VC funding afforded to female led businesses – how can we change the disparity?

female founder leaning on her desk with computer, private equity, entrepreneur

At current rates, for all-female teams to reach even 10% of all deals will take more than 25 years (until 2045).

The Alison Rose Review of Female Entrepreneurship published in March 2019, highlighted that up to £250 billion of new value could be added to the UK economy if women started and scaled up new businesses at the same rate as men.

One would hope things have changed, but data showed in 2020 of the £12bn of UK VC investment invested, companies with an all-female founder team would have received just £120.1m. Whilst all-male counterparts, just shy of £10.7bn. This again though we fear if more about applications rather than decisions. A report on acceptance / rejection would be interesting but not easily put into context, but essentially female founders securing investment is increasing but still far apart from that taken up by all male founder businesses and the question should be why are there fewer female founders seeking investment?

What are Female Founders though experiencing right now?   

  1. Women rarely attended the mainstream pitching events as they have confidence issues and VCs don’t always taken them seriously
  2. Women are still criticised for asking for too little and they will only ask for the exact sums needed
  3. If a VC shot down the pitch women often took this hard rather than fighting back
  4. VC’s and many funds would drill down a female pitch far more extensively than the men
  5. Women overthink – they need 99.9% of the figures and facts before they go for it – but having 75-80% sometimes is enough
  6. Women are cautious and pedantic, they are fully motivated, committed, and ready to go without being blasé about investor monies

There are many success stories and female founders calculated risks can reap rewards quicker and steadier

A City Law Firm founder Karen Holden, comments on what it was like 14 years ago setting up.

‘As a female founder that set up 14years ago I had no idea where to turn for advice & support. I had £5000 a suitcase of files and no clue. I was also, if you can believe this as a lawyer, asked by a potential legal partner ‘wasn’t I at an age where I would be considering a family ‘, which really knocks your confidence about being taken seriously. I was starting out in a male dominated City & traditional sector, so it was daunting. I didn’t let anything stop me though even where there were admittedly tears and battles to be had. If a door closed, I went on to another or bashed it down, but it was exhausting, sometimes demoralising and hard to stay motivated ‘Karen Holden List Legal 500 award winning law firm.

Looking back at the last 15 years there have been changes and progressive movement, but more is definitely still needed so how can ‘We’ work together to change this same old conversation !! many women want to remove the barriers and break the mould so as a disruptive, innovative female lawyer & founder and Karen says she want to change things, working with my fellow male and female peers to scale female businesses’.

Karen Holden

Level Up Summit

 

Don’t miss our Level Up Summit on 06 December, where we’re tackling the barriers for women in tech head on. Join us for keynotes, panels, Q&A’s & breakout sessions on finance, people management, negotiation, influencing skills, confidence building, building internal networks, maximising the power of mentorship, and much more. 

Karen Holden wants to help these businesses grow and if we can help change the dynamics and work with our strengths this is what I want to be doing. I set up the www.femalefoundersgrowth.com program to do just this – not just investment, but professional advice, support and bringing partners to the table that have a genuine desire to help female founders.

Do women need a gender specific program?

We want to encourage equality, so we need to change who is in the room; improve the confidence of women so by brining partners men and women into the program who are proactive about female founders this starts everyone on an inclusive planning ground. A safe and proactive environment means they can thrive and be ready if a VC tries to later knock them back. The topics will largely be the same, but we know women, by in large, are not the same risk-takers, but are equally as dynamic so talks and advice are pitched around exactly their profiles.  There are also topics that can be a taboo but are essential for women to thrive from being a working mum, to holistic needs, to confidence boosts required.

Is it all about the money?  

As a woman running my own business, I have seen many ups and down in establishing and scaling my business. I advise thousands of businesses getting ready to start, scale and seek investment right up until they exit or sell. It is never easy and there are always ups and downs, but the market is vibrant right now; investors are keen to enter the UK market and female founders are seeing more active interest than ever before.

Fundraising for many businesses is vital so being prepared is likewise the key. No more so for start-up technology companies who burn through a considerable amount of money, especially when pre-revenue. As such getting investment is essential, but being prepared for the deal, having robust contracts, good tax structuring advice, watching cashflow and projections is equally as important as the pitch and end game.

 So, what are the key considerations when trying to raise capital for your business.

  1. Look at all your options debt, grants, EIS, and other tax reliefs 
  2. Do due diligence on your own business before you speak to investors 
  3. Is it the right investor? Do they get you and your business? What’s in it for them? 
  4. Get you Legal Documents robust to dazzle but protect you as a founder 
  5. Decide early how much control you’re willing to give away 
  6. Make sure you own and have protected your IP
  7. Confident & concise business plans and pitch decks are essential – be bold and sell yourself 
  8. Surround yourself with trusted and experienced professionals, mentors, and advisors 
  9. Don’t be afraid to ask questions and 
  10. Don’t worry if you don’t have 100% of the pieces straight away confidence and passion often the investors will work with you to complete the project
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