The UK is the fourth best country in Europe when it comes to starting a business. Bursting with innovators and entrepreneurs in the many sectors spanning tech, it offers well-paid jobs and contributes billions to GDP.
Although the sector is booming, it has a long way to go to improve gender diversity. Tech Nation’s recent diversity and inclusion report paints a bleak picture, stating just 19% of tech workers are women. PwC’s Women in Tech report states only 5% of leadership positions are held by women, with a miniscule 3% of women wanting a career in technology at all.
The lack of availability and therefore visibility of other women in technology can act to discourage women from starting a career within the industry or even starting a business. After all, you can’t be what you can’t see.
When we turn to look at the stats for women as founders seeking funding to grow, there is little to be cheerful about. In its 2018 paper on venture capital and female founders, the British Business Bank states 89% of all capital invested by UK Venture Capital firms went to all-male founded businesses; 9% to businesses with a mixed male/female founding team, and a measly 1% to solo-female founders or female-only founding teams.
So why should we encourage more women to start their own businesses and to seek investment, when the picture appears bleak and the journey tough?
Aside from the fact that we should support anyone with a dream, there is a hardnosed economic argument to support the need for more women to start up their own companies. Research from the Boston Consulting Group suggests that if women started businesses at the same rate as men, global GDP could rise by 6%, adding up to $5trn to the world’s economy.
Knowledge of the funding landscape and how to navigate it is generally limited in start-ups, with advice difficult to locate and often contradictory. Is equity right for your business? Or is debt? Should you grow quickly, or bootstrap and try and go it alone?
The Rose Review published In February 2019 highlighted that typically, a woman’s network is incredibly different to a man’s, and when she comes to raising investment her network tends to be misaligned with her requirements.
Whilst there is no short-term fix to this imbalance, whether it be in the board room or in your tech team, the finance and tech sectors must continue to work cohesively to proactively support women-led businesses. This must happen whilst striving to merge diversity-led thinking into all products and services such that, at a point in the future, when we say ‘founder’, we implicitly mean both genders.
My advice for female founders, especially in the current climate, would be to not shy away from highly accessible funding such as the government’s Bounce Back Loan Scheme (BBLS) and to seek support where possible.
During lockdown, more people than ever will be starting businesses from innovative ideas, so it is important to attend webinars and virtual roundtables where possible to gain invaluable insight. For funding options, I would recommend looking into the government’s Innovate UK scheme, in which businesses can compete for government-backed funding. Other women-led innovate networks are also particularly helpful in accessing funding where the barriers to entry are high elsewhere.
For investors looking to help female-founded businesses, I recommend finding those inclusive networks for women and shout loud about the impact that funding can have on these businesses. Be bold and ask questions to financial corporations about their gender investment diversity statistics and ask if they have committed to the Investing in Women Code, which is a commitment by financial services firms to improve female entrepreneurs’ access to tools, resources and finance. Change is happening, and it will continue if we keep talking and asking those important questions.
At GC Angels, we support early stage businesses seeking £100,000 to £2m. We regularly host events across Greater Manchester and have established two distinct brands titled ‘Later Pitches’ and ‘We Smash Barriers’, the latter aimed primarily at female founders. Since launching in 2018, we’ve completed 20 early stage tech start-up investments with 52% of capital invested into female founders.
Jess Jackson, investment director at GC Angels, discusses the difficulties female tech founders face when trying to enter the sector and find funding. https://www.computerweekly.com/blog/WITsend/Breaking-down-the-barriers-for-Women-in-the-tech-industry