Gender funding gap: Only 3.5% of equity investment goes to female-led businesses

85% goes to male-led firms

gender funding gap

Accelerate to Excel, the latest annual report from the Female Founders Forum has revealed just 3.5% of equity investment for H1 2023 went to female-led businesses, compared to 85% going to male-led firms. 11.4% went to startups co-led by women and men.

Supported by The Entrepreneur Network, Barclays, and Bearhurst, the report found that despite the number of women starting businesses in the UK rising to record levels, female-led startups continue to receive just a fraction of the equity investment male-led companies do.

In terms of the proportion of deals, female-led startups still comprise just 10% of the total amount, compared to 75% involving male-led startups, and 15% involving startups co-led by women and men.

Rt Hon Caroline Nokes MP, Chair of the Women and Equalities Committee, said, ‘More work is required if we’re to maximise the entrepreneurial potential of women in Britain. The reward on offer is huge, with the Treasury itself estimating that up to £250 billion of new value could be added to the British economy if women in the UK started and scaled new businesses at the same rate as men do. To unlock that prize, we cannot sit idly by.

The report examines a number of reasons as to why the gender funding gap exists — including investor biases, inequalities in networking, cultural misperceptions about female founders, and childcare responsibilities.

Elsie Rutterford, Founder, BYBI said in the report, ‘With the percentage of female founders or leaders being lower than men, it can mean finding female mentors or advisors can be tricky as the pool is simply smaller. That smaller volume of role models also impacts your belief of a female that founding and exiting a startup successfully is doable.

Additionally, the report proposes policy recommendations for tackling these obstacles — from suggesting more government evaluation, to decreasing childcare costs.

Featured image: CoWomen / Unsplash