Female-founded new businesses get 1p for every £1 of venture capital investment

Female-led start-ups get just a penny for every £1 of venture capital investment in the UK, research commissioned by the Chancellor shows.

Start-ups with all-female founder teams get less than 1% of available capital compared with 89% invested in all-male founders, according to the British Business Bank. Mixed gender teams make up the remaining 10%.

It means businesswomen could be missing out on billions of pounds in funding, as companies with no women on their founding teams hoover up an estimated £5 billion a year.

The research, undertaken with Diversity VC and the British Venture Capital Association (BVCA), will inform ongoing Government work to boost untapped potential of businesses which are facing barriers.

The findings indicate that at current rates of change, it will take more than 25 years for all-female teams to receive 10p for every £1 of UK venture capital investment.

“More women starting up businesses will supercharge economic growth,” said Liz Truss, Chief Secretary to the Treasury.

“It’s incredible that in 2019 men seem to have a virtual monopoly on venture capital. We need more investment going into start-up ventures and more women putting businesses forward.

“It’s in everyone’s interests that financing processes are open and meritocratic to grow the economy and make use of all the talent we have.”

The research was originally commissioned by Philip Hammond during his 2017 Budget. It identifies specific barriers faced by female-led firms in accessing venture capital.

Alice Hu Wagner, managing director of strategy and economics at the British Business Bank, said “seemingly simple solutions” had proven to be flawed because “mandating female decision-makers risks tokenism” while earmarking women-only money does not address “underlying closed networks and experience gaps”.

“We need new approaches to addressing these issues and this report is just a first step,” she added.