Funding falls for firms with women founders

Investment in female-led businesses fell for the first time last year, figures from a Barclays study show. The data shows that while a record level of investment went into new businesses, the total put into companies with at least one female founder fell by an average of £1million.

INVESTMENT in female-led businesses fell for the first time last year, figures from a Barclays study show.

The data reveal that while a record level of investment went into new businesses, companies with at least one female founder saw the total put into their companies fall by £1million.

This is the first time a drop has been reported since the data were first collected in 2011. The proportion of funds invested in businesses with at least one female founder had risen from four per cent in 2011 to 15 per cent in 2016, but fell back to nine per cent last year.

Between 2016 and 2017, the amount of funding raised by male-led companies increased by 55 per cent, compared with a fall of 0.1 per cent for those with a female founder.

The report, by the Female Founders Forum, a women’s entrepreneurship group, found that male investors were more negative about women who pitched to them and more likely to dismiss their ideas. Women make up a very low proportion of angel investors – who invest in small start-ups – and venture capitalists, the report said.

A study by Harvard Business School found that if a business came with a female name, picture or voice, it reduced the odds of it receiving investment. Questions from investors to female entrepreneurs tended to focus on potential losses, while those posed to men focused on gains, research suggested.

Sophie Jarvis, head of the Female Founders Forum, said: “There is significant evidence to support the fact that the funding gap is influenced to a large extent by unconscious biases from investors to the detriment of women. Solutions include increasing the number of women working for venture capital firms, the Government funding, experimenting and evaluating models of mentoring schemes and the media focusing on female entrepreneurs’ businesses, instead of their gender.”

The Daily Telegraph has launched a Women Mean Business campaign to encourage the growth of female-led businesses. The campaign, backed by 200 figures in British business and politicians, including Martha Lane Fox and Maria Miller MP, chairman of the women and equalities select committee, is calling on the Government to redress the balance of investment in male and female entrepreneurs.

The report argues that there is a “pressing need” for more female business role models and says many women are held back by a lack of confidence.

Jessica Wilkinson, the entrepreneur and founder of communications agency Petal & Co, said it was the biggest barrier to women starting their own businesses.

“This is why it matters so much that we shout about success stories and create powerful networks which support women on their journey,” she said.