Government must remove barriers for women in business, says new report
UK venture capital firms are well behind the rest of the world when it comes to investing in female entrepreneurs, with the low level of women on boards proving to be a major barrier to change.
That’s a key conclusion of a report published by global research organisation GEM and supported by Liverpool-based The Women’s Organisation. It found men are more likely to invest in male-led businesses and, therefore, are missing out on real growth opportunities.
Women’s Entrepreneurship 2020/21: Thriving Through Crisis was published by The Global Entrepreneurship Monitor (GEM). It carries out survey-based research on entrepreneurship and enterprise ecosystems around the world.
One of the key findings from the report, produced periodically since 2005 and then annually since 2019, is that female entrepreneurs are more likely to invest in women founders and in businesses offering products and services for female consumers and markets.
However, only 13% of senior people on UK investment teams are women and almost half (48%) of investment teams have no women at all, according to The Alison Rose Review – an independent review of female entrepreneurship commissioned by the Government and delivered by NatWest Bank.
The report from GEM highlights that the funding gap is an issue particularly pertinent in the UK, as it acts as a barrier to women starting and growing their own businesses in the UK. This funding gap is a key contributing factor in the rate of female entrepreneurship in the UK (6.1%), which falls far short of the global average (11%).
Local enterprise manager for the North West at Nat West, Natalie Hughes, said: “As we continue to rebuild the economy following the COVID-19 pandemic, it’s imperative that we support entrepreneurs, especially female entrepreneurs, in growing and scaling their businesses.
“For many this may mean looking at what investment options are available, but figures highlighted in the Alison Rose Review of Female Entrepreneurship paint a stark picture – particularly as we now know that women investors are more inclined to invest in women-led businesses.
“To help address this, the Rose Review Council has published Guidance and Best Practice: Examples For VCs And Institutional Investors, a document created by leading investors within the venture community as a resource for institutional and other investors who wish to maximise access to diverse deal flow, and manage their companies and portfolios to optimise return.”
She added: “But we also recognise there is a need to tackle this issue in the North of England – and particularly in Liverpool – which is why we have targeted that region with specific investment campaigns and goals.
“Fund Her North is a Northern-based collective of over 28 women – in VC’s, funding organisations and angel groups – with a combined investment power of over £450m.
“Each of the members of the Fund Her North collective has already made a lasting effect on female entrepreneurs in the North, with a combined investment track record of over £75m invested in female-led, start-up businesses. Since its launch in October 2021, Fund Her North has facilitated £4.2m of investment in the North region.
“And while this is good news, we know for many female entrepreneurs, it is understanding where to start – which is where we can help through our continued work with The Women’s Organisation and other business support organisations across Merseyside.
“Whether it’s sign posting an entrepreneur toward the right investor or providing an overall financial health check for a business, we can support female entrepreneurs in their decision making around investment and how to scale their business.”
The Women’s Organisation is the largest developer and deliverer of training and support for women in the UK. It has supported more than 60,000 women and helped to create in excess of 4,000 businesses since it was established in 1996.
Policy and research co-ordinator at The Women’s Organisation, Helen Burkinshaw, said: “In direct response to findings from the Alison Rose Review, the Government has announced an ambition to increase the number of female entrepreneurs by half by 2030 – this is equivalent to nearly 600,000 additional female entrepreneurs setting up and scaling businesses. It was a heartening pledge with all the potential to unlock talent and propel economic recovery post-pandemic.
“However, it is no easy feat. Women continue to face huge challenges trying to access funding and investment. These barriers are historic and ingrained and so large scale culture, policy and investment change is necessary to fix what is a systemic problem.
“Yes, the Government must lead this change, but it is imperative it invests directly in this key economic development area whilst also working in partnership with the business ecosystems that support female enterprise development and research.
“Specialist research and business support practitioners possess the knowledge, expertise and insight to help shape a comprehensive new strategy.”
She added: “So, how can we, in real terms, improve the landscape for women entrepreneurs? Well, for starters through public sector investment and support initiatives, the co-ordination of women’s business angel networks, impact investing, and women-focused policy making.
“This isn’t just the right thing to do from an equality perspective, it also makes economic sense. A diverse and fully inclusive economy can only make our society healthier, wealthier and inspire a new era of community cohesion.”