Female entrepreneurs could add £250 billion to the UK economy with equal access to funding and proper support, according to the Business and Trade Secretary and Minister for Women and Equalities, Kemi Badenoch.
The remarks were made following the release of the third annual Investing in Women Code (IWC) report, which showcased the progress made in closing the finance gap between male and female entrepreneurs.
The IWC has become a pivotal Government-led initiative, addressing the findings of the Rose Review that identified a lack of funding support as a significant barrier for women seeking to scale their businesses.
A powerful code
The IWC now covers a large proportion of the SME lending market, accounting for 39% of UK venture and growth equity deals, marking a notable increase from 24% in 2020. Furthermore, 35% of all venture capital deals made by IWC signatories in 2022 were in female-founded companies, surpassing the market average of 27%.
Sheila Flavell CBE, Chief Operating Officer for FDM Group, commented: “The report demonstrates how important progress has been made, but further work must be conducted to close funding gaps. Providing equal access to finance will be the necessary boost to unlock the potential of female-founded businesses. It will help bolster the Government’s commitments to growing the economy further – even amongst the challenging economic backdrop, the issue should not be dropped.
“The actions of signatories implementing various measures to improve their support for female entrepreneurs is crucial in boosting confidence. Implementing policies, female-focused networking, the recruitment from a more diverse pool of candidates and the offering of mentoring from other female founders, to name a few, are some of the key efforts necessary to achieving gender equity in the start-up system.”
The report also highlighted how few female investors there are in investment committees. On average, signatories reported a mere 32% female representation in their investment teams, with less than a quarter (24%) on their investment committees. The findings underscored the crucial relationship between diverse investment committees and successful pitches from all-female and mixed-gender leadership teams, emphasising the need to address this area.
Over 200 organisations have pledged their commitment to the Investing in Women Code, signifying a growing number of individuals and entities dedicated to increasing financial support for women-led businesses. The code is the leading approach to bridging the persistent finance gap in the entrepreneurial landscape.
Expressing her support, Kemi Badenoch stated, “It’s excellent that members of the Investing in Women Code are leading the way in addressing the finance gap between male and female entrepreneurs, ensuring that the UK is the best place in the world to start a business, regardless of gender.”
Levelling the playing field for female entrepreneurs
As the report highlights the potential economic benefits of empowering female entrepreneurs, it also calls for further action to level the playing field. Implementing policies that promote equal access to funding, fostering female-focused networking, diversifying candidate recruitment, and providing mentoring opportunities from experienced female founders are key measures necessary to achieve gender equity in the start-up ecosystem.
With a concerted effort from all stakeholders, including the Government, financial institutions, and businesses, the UK can create an environment where female entrepreneurs can thrive, significantly impacting the economy while breaking down existing barriers and fostering true gender equality in entrepreneurship.