Our fearless leader attended SiS Women’s Health “facilitating impact in women's health innovation” where female founders and investors are brought together and showcased, and I am completely delighted not only that these events exist, but that people like Rachel are at the table shaping the narrative. A couple of weeks ago I was lucky enough to be at the launch of the Female Founders Initiative set up by the Department for Business and Trade’s Venture Capital unit. These events are so inspirational. They are encouraging to everyone in the room. They give a platform to female founders that doesn’t exist at volume across the rest of the investor landscape. I can never adequately express how much being in a room with amazing women does for my outlook and positivity for the future. Bravo everyone.
Just under 2% of total venture capital funding goes into female founded businesses
But I admit, I’m also a tiny bit mad about it all. Why should we still need these events? My whole career – the best part of a quarter of a century – has repeated the same narrative. We can all trot out the stats – just under 2% of total venture capital funding goes into female founded businesses, rising to 17-20% if there is at least one male co-founder. At the event the other week I was reminded of the soundbite “women founded businesses deliver 35% more then businesses launched by men alone”, intrigued to discover its origin, I looked it up. Apparently, one well-known reference comes from Boston Consulting Group's (BCG) 2018 report, which found that businesses founded by women generate higher returns on investment despite receiving less funding than those founded by men. Specifically, the BCG study concluded that for every dollar of funding, female-founded businesses generated 78 cents, while male-founded businesses generated 31 cents. That was six years ago! Why didn’t the stats flip immediately in favour of investing in female founded businesses when the maths is clear?
My answer is that it takes an awful lot of women operating within the system to change it, and these system shifts therefore take generations. I absolutely love working for, mentoring, supporting, and investing in female founded businesses. I know a lot of people like me and increasingly there are more of us out there. A generation ago there were very few women who had gained enough experience in the workplace and achieved sufficient seniority or funds to be able to offer this type of support.
Female-founded businesses accounted for 20% of all new enterprises in 2022
Just like there are now increasing numbers of women founding their own businesses. The Alison Rose review of Female Entrepreneurship found that, in the UK, the number of female-founded businesses has seen a notable increase over the last five years. In 2022, over 150,000 businesses were founded by women, marking a significant rise from previous years. Female-founded businesses accounted for 20% of all new enterprises in 2022, compared to 16% in 2018. Younger women, especially those aged 16-25, saw the largest increase in entrepreneurship, with a 25% rise during this period.
It’s these women who will generate the wealth that will be sufficient to tip the balance in investment – both by earning their seat at the tables of the major investment houses, and by having sufficient wealth to invest at scale. Which means we might still be another decade or two from tipping the balance and changing those boring old stats. But I’m still heartened by how much progress is being made, and I’m glad that folk like Rachel are at the forefront of it.
Written by Verity Baldry, Chief of Staff