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Businesses led by females on average received 6 times less funds than their male counterparts.
Funding into new UK businesses still weighs heavily in favour of male-led businesses.
According to startups.co.uk, men receive in general 6.2 times more business funding than women.
Using data collected from this year’s Startups 100 entrants (244 new businesses in total), here are the key insights into the findings:
On average, a female-founded business receives £763,300 in funding, compared to £4.7 million for a solely male-owned organisation
Businesses with both male and female founders averaged at £6.2 million this year
Women make up only 15% of the decision-makers in the UK venture capital industry
Half of women-led businesses are bootstrapped or self-funded, compared to just 32% of male organisations
Coming just after International Women’s Day 2023, the research highlights that there’s still a lot of progress to be made before women’s new businesses are treated equally to men’s. Please see the table below breaking down the funding types by male-led, female-led, and male and female led businesses:
As a consequence, women are having to bootstrap/self-fund their new businesses more - 50% in comparison to 32% of male-led. This type of funding has a higher chance of failure as well as more of a personal financial risk, which in turn feeds into the negative atmosphere and attitude that women are often faced with in business.
“Confidence is a huge issue”, says Sahar Hashemi, CEO of Buy Women Built. “If you feel the statistics are against you, no one will ever try.”
From the research, two of the main types of business funding - Angel Investment and Private Equity Funding - show the clear difference in funding between men and women owned businesses with both being 10% higher towards men. Businesses that have both a male and female leader also increase the rate of investment by 4% and 6% in these areas respectively.
Startups.co.uk writer and researcher Stephanie Lennox stated: “More female-led businesses were invested in this year – but the numbers are still exceptionally imbalanced, suggesting that the gender funding gap is still a significant issue for women in business today.
Female entrepreneurs looking to start a new business venture may face more difficulties, but by knowing the best business grants for women, crafting a well-rounded business plan, and looking to inspirational entrepreneur success stories, there’s so much that they can achieve now and into the future.”
Here are some insights and initiatives that are empowering funding women-led businesses:
Female entrepreneurs contribute £3.51 billion to the UK economy each year
According to the Rose Review, £250 billion could potentially be added to the UK economy if women matched men in receiving investment for their fledgling businesses
Melissa Snover, CEO & Founder of vitamin brand Nourished (and a member of our Startups 100 list for 2023) secured £1.95m - the highest seed round ever raised by a female founder
The Tory Burch Foundation - by the American fashion designer and businesswoman who was listed as the 88th most powerful woman in the world by Forbes in 2020 - has to date distributed over £62.4 million in loans to nearly 5,000 women
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