Investment in female-led businesses could lead to a potential £250bn boost for our economy, but holding us back are barriers including education, isolation and a lack of confidence.
That was the challenge discussed at a virtual roundtable event attended by Alison Rose, CEO of NatWest, which took place last week to address the problem - and uncover the solutions - with a host of entrepreneurs, investment experts and business people from across Greater Manchester.
Hosted by Heather Waters, regional enterprise manager, Manchester, at NatWest, the roundtable was held in partnership with Fund Her North, a volunteer collective of over 28 women with a combined investment power of over £450m.
Joining the NatWest representatives on the panel were Lou Cordwell, chair of the Greater Manchester Local Enterprise Partnership (LEP) and founder and chair of design firm MagneticNorth; Chi-Chi Ekweozor - founder and CEO of audience interaction firm Assenty Ltd; Jess Jackson, Head of Investment at GC Angels and founding board director of North Invest; and co-founder Helen Oldham, who is also the founder of North Invest along with Adam Beaumont.
Completing the panel lineup was Peter Flavel, CEO of Coutts; alongside entrepreneurs Becky Baker, founder of community app for dog owners K9; and Grace Vella, founder and CEO of female football brand Miss Kick.
Ms Rose launched the event by detailing a stark finding from her very own Rose Review published in 2019 into female entrepreneurship, which shed light on the barriers faced by women starting and growing businesses.
Asked why investment in female-led businesses is so important, she said: “It's a very simple question.
“The Rose Review talked about the fact that there was so much potential, and if we could get the female-led businesses to access to funding and support just to the level of best practice that we see across the globe, we were going to unlock a £250bn contribution to the UK economy.
“So the cold, hard facts are that female entrepreneurs are the key to unlocking growth in the economy. There is all that potential, and there are too many barriers in the way.
“The biggest issue is that only 1% of venture capital (VC) funding goes to female-led businesses.
“So you've got this wall of money, and it's not getting to businesses, and one of the points that I made completely clear is that it’s not about funding bad firms.
“This is about funding brilliant female entrepreneurs, brilliant businesses and giving them the same access and support that they need to get, that is not there.
“So it's absolutely imperative. It's about unlocking growth. And it's about removing barriers that shouldn't be there so that we can get the right support for female entrepreneurs.”
Ms Cordwell said women are less likely to apply for investment funding due to a lack of confidence, which can be incorrectly perceived as a lack of capability.
She said: “It's generally a combination of things. Women often talk about a lack of skill or capability. It’s not necessarily - it's normally confidence, but it masquerades as their own perception that they don't have a particular skill or a particular knowledge that they should have.”
She added that isolation among female entrepreneurs was another major barrier to investment, partly due to the Covid-19 pandemic.
“[Too] often female entrepreneurs still feel more isolated than they did 12 months ago, because they don't have some of those physical touch points. But there's a real sense of isolation, which is a volume thing, isn't it?
“There aren't enough of us so we don't know others because they’re harder to reach.
“If you know female entrepreneurs, connect them randomly to other female entrepreneurs, because there's a big thing around knitting together that community, and it's amazing how quickly some of that begins to then escalate in that people morally support each other.”
A final point for Ms Cordwell - and a theme that was revisited time and again throughout the discussion - was the subject of education.
She said: “The perceived access point is about putting people on a platform - that it is still down to the idea of ‘you need to see it to be it'. My hope is that my daughter has grown up in a house where it will be perfectly normalised that you start your own business.
“So you need to normalise this behaviour to the point where it begins in schools at age four, five and six.
“When you see the confidence wobbling, you've got to begin to get that injected.
“From a LEP perspective, we've got a very inclusive vision of growth that we've mapped out for economic recovery here in Greater Manchester. and it feels like there's a very obvious low hanging fruit with female entrepreneurs.
“Here's a really easy way that actually we can just overcome these barriers very, very quickly, we could have a massive impact on the UK economy.”
Ms Ekweozor agreed that a lack of confidence and an “imposter syndrome” was a huge barrier to investment for many.
She said: “It's amazing the breadth of founders that it’s affecting, not just in tech.
“There's an absolute need for community for women, that gives them a place they can actually share their journey as they go along.
“I think that the more we make those communities visible, the better it is for everyone concerned.”
Ms Ekweozor, who also founded the Female Tech Founders network in the North West, added: “I think one of the things Fund Her North expect to achieve is making it easier to get that unbiased, transparent feedback about funding.
“Because a lot of people think they exhaust friends and family and then think about banks, and then shy away from it, because it starts to feel like they have to prove so much before they get any funding.
“'I’m a software engineer myself, and I had to go through all those barriers, and it was in doing a female tech founder meeting that made me think ‘okay, actually, I don't need to have all my ducks in a row to do this - I can start and create a community that will help other people as I learn’.
“And that's what I've found, as I've been doing it.”
Jess Jackson was one of the panellists representing Fund Her North - a volunteer collective of over 28 women in VCs, funding organisations and angel groups with a combined investment power of over £450m, launched last year.
Each member of the Fund Her North collective has already made a “lasting effect” on female entrepreneurs in the North, with a combined investment track record of over £75m invested in female-led, start-up businesses.
The organisation is aligned with the strategic growth ambition of the Northern Powerhouse, as well as the findings of the Rose Review and the Investing in Women Code.
Ms Jackson agreed that with women generally receiving less from funding rounds, confidence is a big issue for many.
She explained that benefits of the Fund Her North platform include peer-to-peer networking and warm referrals for members.
“Anyone in the network, whether they're at the private equity end of the scale, or at the angel investing side, we're more than happy to do referrals - and that’s been really critical in providing platforms for female founders.
“We're actually starting to see investment offers coming through as well into some of those businesses that we've given that platform for.
“So it's been incredibly heartening some of the work that we've been doing, and I really do look forward to what we can continue to do.
“But I think it's worth acknowledging the high proportion of women going through accelerators is great, but where do they go after that? We don't want to lose that enthusiasm.
“We want to channel that energy right through into that funding pathway. And so that's why we exist. It's confidence building, education, and platforming.”
She said that with women typically raising less money in funding rounds, the effects of the pandemic had been felt “more acutely” - “because they’ve got less to make last longer”.
She said: “That was a challenge, however looking at our space in the market, the use of funds for early-stage rounds tends to be in product development, not necessarily on ‘sell, sell, sell’.
“So to some extent a lot of our portfolio, whether they were female-founded businesses or not, were quite insulated.
“They've just carried on developing their products, thankfully, but just with a bit of an eye on the horizon, no matter how far away it might have been.”
Helen Oldham, the other co-founder of Fund Her North, said one of the early initiatives the group has launched is female-only pitch events, of which there have been four, and which have produced four rounds of funding.
Ms Oldham, who founded not-for-profit early-stage investor business North Invest, said her “greatest reflection” so far from Fund Her North was that entrepreneurs should hold a pre-funding conversation with the team.
She said: “It’s that first-step conversation with people like the group at Fund Her North who can give a really broad breadth of advice around everything to do with scaling a startup and finding investment.
“When I look at the skill set of the 27 women in the group, we could answer pretty much any funding question, or connect you to a range of other female entrepreneurs who might be at a different stage of their journey, or provide you just with some basic educational information that you can read and digest in your own time.
“So we're very much around handholding - taking you into the individual VC or angel group so that we can help you find the right person in that organisation, but then sticking with you as you go through the process.
“Because the likelihood is that if you're going to a VC, particularly for funding, you're going to be dealt with by a male investment director.
“Having somebody in that organisation who's a woman who's helping you navigate that, I think is super powerful.”
The panel also featured two entrepreneurs who had actually overcome those barriers to funding - Ms Baker, founder of community app for dog owners K9, and Ms Vella, founder and CEO of female football brand Miss Kick.
Ms Baker said the biggest challenges for her were around education and accessibility.
She explained: “I was a first time entrepreneur, first time founder, I'd always been an employee up until that point.
“I had no clue about the investment landscape at all. I was learning about running a business in itself, nevermind the investment side of things.”
She said she “completely perchance stumbled” on an accelerator programme
“It was pure luck that I stumbled into my opportunity, and it shouldn't have been,” she said.
“I'm pretty savvy, I did my research. I tried to find what was out there. But it was still quite hard for me to come across, so accessibility to things like accelerator programmes is a big thing for me.
“Even now, even though I'm still quite early on in my journey, I get other females just through my personal networks asking ‘how did you do it?’ And I'm giving advice, but I'm still really early on in my process.
“It should be taught in schools. Entrepreneurship is something that is becoming more and more common, and it absolutely should be the norm.”
She added: “We have some amazing female entrepreneurs out there in the public eye that are fantastic and aspirational, but they're not necessarily accessible.
“I want to speak to someone who's six months further on than me, or 12 months further on than me.
“They might not have had wild success but they've been through the challenge. I want to know their stumbling blocks, and the lessons I could learn from them.
“I feel extremely fortunate. I landed on my feet, but it could have been a very different story.”
Ms Vella said she came into business “not wanting to be an entrepreneur” - it was just the former Liverpool and Manchester City player’s passion for football.
She said: “Thankfully for me, I was picked up while I was at university for a pre-accelerator.
“That really gave me the skill set and the knowledge about investment - what it was and the foundations that I needed.
“I got approached by an investment fund via LinkedIn and I went into this meeting, and I was asked ‘how do you value your business?’ and you don't know what you don't know, right?
“But I think why I managed to secure it was I had an amazing group of people behind me cheering me on.
“I think we sometimes underestimate how important it is just to have people you can pick up the phone to who you can lean on, even if it's just to blow off some steam or to ask for a bit of advice.
“Your network is absolutely everything. We've just gone for a second round of funding, and it's been a million times easier, just because I've got a group of people around me now who really buy into what we do.”
Like others on the panel, Ms Vella said education is “massive”.
“As a girl, I don't think we're encouraged enough to see entrepreneurship as a pathway.
“I was never in school taught once that this could be a job for me, I fell into it.
“So I think more needs to be done to give young girls these role models to see that they can go and achieve these things.
“Organisations [need to do] a bit of hand holding, it is about learning as you go along, having someone to go to when you do get approached, because you know things can go wrong in this investment world, and it is so daunting to go into. But it's been transformative for me and for my business to have investment and the investors on board.
“I think just knowing that you can do it, seeing it as a viable option for you as a young person is massive and just surrounding yourself with great people.”
As highlighted in the Rose Review update published earlier this year, Coutts is working with Business Growth Fund (BGF) to launch the UK Enterprise Fund.
Through this private investment, together Coutts and BGF said they will bring additional funding, growth capital and support to entrepreneurs, allowing them to scale and grow.
Mr Flavel said networking is “super important”, adding: “Then it's early intervention - getting to young girls early on in their education.
“We look at why so many more men invest in investment products versus women, and the glib answer to that is the marketing's done by men.
“Women don't get to talk about investments at younger ages like men do, and so their education at school, around what illicit markets are, from my perspective is really important.
“I think that is a sort of a segue into having confidence, not just about investing. but about me as an entrepreneur, and running my own business.”