To mark International Women’s Day, new research from YFM Equity Partners has discovered 54% of women are currently struggling to grow their business, compared to 28% of men. Although things are improving, there’s still work to do to remove barriers for entrepreneurial women, writes Laura Sisson, investment manager at YFM Equity Partners.
YFM Equity Partners’ recent research has highlighted the extent to which entrepreneurs are pivotal to the UK’s current and future economic growth, generating £950 billion in annual revenue. Through government policy and our investment landscape, we need to be providing entrepreneurs with the right tools and capital to start and scale their ventures if they are to become the success stories of tomorrow.
In the start up and scale up world, it was therefore pleasing in this week’s Budget to see a full reversal of changes made to angel investor rules earlier this year. Research by Marla Shapiro (HERmesa) and Roxane Sanguinetti (Alma Angels) showed that the initial change reduced the pool of investors eligible to provide early-stage businesses with such a crucial funding source by more than 60%. On top of that, the impact on female investors was even more stark, reducing the number of eligible women by anywhere from 70% to 100% across the devolved regions.
There are different views on whether International Women’s Day promotes or belittles women and their societal value. For me, it’s as good a day as any to continue shining a spotlight on the disparity that women face in our entrepreneur economy, itself a year round issue.
Our research showed that twice as many women think it is difficult to grow a business in the UK than men, with 27% of female founders feeling ill equipped with knowledge on the funding options available to them. 27% also felt they didn’t have the networks and contacts to make use of those funding options they knew about, with over 30% facing challenge in finding the right investors for their business.
These statistics need to change. That doesn’t mean elevating female founders to a platform above all others, but simply creating a level playing field if majority female-led businesses are to ever represent more than one in five of the entrepreneur economy.
As already identified, government policy is one part of the puzzle – especially considering the correlation between women angel investors backing women founders to launch their innovations. Another key element is in the investment world. While things are improving here too, the reality is that a lack of diversity remains within many investment funds, which can see investors assessing investment opportunities through a lens blurred by unconscious bias. It’s going to take time for that change to happen and for funds to better reflect society, and this makes allyship essential today.
Male investors need to actively reflect on ways in which they can support female founders looking to raise capital, fostering an open and collaborative environment in which to pitch their ventures. Only then can we hope to see women reaching their full potential as entrepreneurs, becoming role models for generations to come.
