Driving High Growth Women Led Enterprises
Sooner or later, every woman entrepreneur pitching for investment will encounter a similar experience. They’ll be facing a sceptical line-up of, mainly male, VCs and one will turn to the other to chat about last night’s game. Now, there are many women who enjoy football and follow it avidly. Equally, there are many who don’t. That’s not the point though. When the football talk starts, the object of this pointed exchange is clear. It says: you are not one of us.
In the grand scheme, it’s insignificant. However, it’s just one of the many hurdles women business founders face when trying to build a high growth venture. They all add up too and tell us the backstory to why women entrepreneurs routinely receive a less than 2% share of the UK’s multibillion pound VC funding each year. The odds are stacked against any woman aspiring to become the next Bezos or Musk.
The economic advantages of encouraging more women entrepreneurs to succeed were well documented by the Rose Review, which found that breaking down the barriers for women entrepreneurs could boost the economy by £250bn. While there is encouraging evidence of a pipeline of innovative and potentially disruptive female-led start-ups, only a handful have secured the funds to back their growth. The obvious way to accelerate towards this goal is to offer greater support to women to help them manoeuvre around the minefield that is setting-up a high growth business.
For clarity: what is a high growth business? High growth businesses have certain characteristics, based-upon producing ever increasing revenues, without increasing costs. Think Google. When this tech giant doubles its user numbers, it doesn’t
need to double the size of the team to serve them. Compare this to a business offering, say, counselling. When it doubles its appointment book, it also needs to vastly increase the number of counsellors, therefore decreasing profit.
We know that, for the most part, women tend to set-up businesses that don’t scale. One reason for this is that we have good people skills, so gravitate to ‘people-focused’, labour intensive enterprises, which are not scalable. But this doesn’t tell the full story. As the football talk example shows, women who do want to pursue high growth face repeated examples of unconscious bias when pitching for the investment essential for funding businesses like these. As I know first-hand, it is tough and demoralising to go through hundreds of pitches and hear ‘no’ time and again. (And yes, raising funds for ambitious enterprises does take hundreds of pitches). Who wants to put themselves through that?
It’s not just the funding issue either. Society is not particularly tolerant of women entrepreneurs, offering little or no support framework, particularly for those with pre-school, or young, children. Even the language used about women entrepreneurs is off-putting. The term ‘mumpreneur’ has patronising undertones, for example. It implies women entrepreneurs shouldn’t stray too far from the kitchen because they don’t stand a chance of being the next Zuckerberg.
Change should be led from both sides:
• The VC community needs to up its game and make the investment environment more welcoming to women, at long last embracing the highly investible qualities that make us ideal entrepreneurs. While they are about it, they need to recognise that enormously talented, innovative women can be found all over the UK, not just in the Square Mile. Meanwhile, it is to all our advantage if we support individual women entrepreneurs to find a way over, under and around the challenges they face.
• The government and industry need to work together to create a political and regulatory environment that supports women-led businesses to scale up and thrive.
Navigating these challenges is not easy. When setting-up Starling Bank seven years ago, there was a lot I didn’t know about seeking investment for, and then leading, a high-growth enterprise, so I had to figure it out as I went along. As I moved between one pitch after another, I frequently mused on why the world is dominated by a handful of serial entrepreneurs who start and then exit one business after another. I concluded that they’ve learned the playbook and know how it is done.
There are no guarantees in business, still less in high growth ones, but we could make it easier for the next generation of women entrepreneurs by providing them with an entrepreneurial playbook. This is why I have joined efforts with colleagues from industry, the VC community and the Government to create a High Growth Enterprise Taskforce. The goals of this Taskforce will be to:
• Give women the playbook to start high growth businesses, particularly in Science, Technology, Engineering and Mathematics, and resources to scale up.
• Influence venture capitalists and the wider investment community to recognise the value of women entrepreneurs.
• Campaign to challenge negative gender stereotypes around entrepreneurship, building on Starling Bank’s #MakeMoneyEqual initiative.
We don’t want to simply see off the football talk. In fact, we’re the national banking partner of the Women’s EURO 2022 tournament this year, where we’ll be championing the brilliance of women players and fans across the UK. Instead, what we want is to, at long last, create a level playing field for women entrepreneurs building and leading high growth businesses.