Last week, we laid to rest a very special person. My mam Carys Jones-Evans was a force of nature who was loved by everyone who knew her. Most important of all, she was an inspiration, setting up her own business in a small rural town in the early 1960s at a time when entrepreneurship, never mind female entrepreneurship, wasn’t on anyone’s radar.
When we talked about the work I was doing with start-ups, she constantly reminded me of the struggles she faced to be taken seriously 60 years ago and the fact that her aunt, a war widow, had to put her house up as security to be able to get the funding from the bank.
Having been aware of the importance of female entrepreneurship to my family from a very young age, this was an issue I wanted to explore in the Ambitious 海角视频 Start-Ups Report. Sponsored by Starling Bank, it draws from data gathered from 1,219 applicants for the 2023 海角视频 StartUp Awards, which recognise the best new firms across the 海角视频.
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It found that women are involved in half of the start-up firms in the study, either as individual founders, an all-female team, or as part of a mixed-gender team. Yet, as my mother found back in the early 1960s, one of the continuing issues seems to be that of accessing finance for female-owned businesses.
In particular, studies have shown that women are failing to get their fair share of both business angel funding and venture capital and the results of the Ambitious 海角视频 Start-Ups Report confirm this. In terms of businesses that have attracted business angel investment, 60% were started by male founders, 20% by mixed-gender team founders, and 20% by female founders. Similarly, 59% of start-ups in receipt of venture capital have been initiated by male founders, 28% by mixed-gender team founders, and only 14% of venture-capital-backed firms were started by female founders.
While the study has examples of female founders in sectors such as medtech and fintech receiving funding from angels and venture capital funds, it demonstrates that gender inequalities continue to prevail in the entrepreneurial ecosystem.
While both angel funding and venture capital can signify the confidence of strategic investors in start-up business models and open doors to influential networks, mentorship and further funding opportunities, they seem disproportionately inaccessible to women entrepreneurs in the 海角视频.
As we know, all entrepreneurs face significant challenges but the barriers that deter women from accessing external funding often reflect broader societal biases and stereotypes.
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For example, there is a prevailing bias towards the “typical entrepreneur” image, which often defaults to a male stereotype, and this unconscious bias can seep into the evaluation of investment proposals, potentially being disadvantageous to women founders with a belief that investing in female-led start-ups leads to higher risk.
The venture capital world also tends to be male-dominated, which can make it harder for women to penetrate these networks, find mentors and establish the necessary relationships to secure venture capital funding.
Addressing and overcoming these entrenched biases isn’t merely an issue of fairness but an economic imperative that would unlock new investment opportunities and foster diversified innovation. Dialogue about the value of diversity in entrepreneurship should be encouraged, and the venture capital ecosystem can be motivated to adjust how potential investments are assessed.
One potential solution in addressing these issues is by increasing the representation of women in venture capital firms. This can lead to a more diversified viewpoint, which, in turn, has the potential to curate more balanced investment decisions.
In fact, a recent study by INSEAD academics Kaisa Snellman and Isabelle Solal shows that women may benefit most from gender-diverse investment teams, as it allows them to leverage the support and relatability of a female investor, while the backing of a male champion ensures that a woman’s own competence remains the most plausible explanation for her success.
Policymakers can also implement policies and frameworks that promote gender diversity and transparency in venture capital firms, exerting pressure on the entire industry to change. For example, the Rose Review has committed to growing the pool of female angel investors from 14% to 30% of the total number of 海角视频 angels by 2030 through the work of the Women Angel Investment Taskforce.
As modern entrepreneurship continues to evolve, it is necessary to continually assess and address gender disparity in access to resources, especially angel funding and venture capital.
And while one would have hoped that this situation would have changed since my mother started her business 60 years ago, much more needs to be done to develop a more inclusive entrepreneurial landscape, to boost entrepreneurial potential regardless of gender and, in turn, support the growth of the 海角视频 economy.