This is the message from Angela de Souza who discusses the funding gap which has seriously disadvantaged women business owners since the emergence of Covid-19.
The Covid pandemic has had a profound impact on the global economy and women, in particular, have been disproportionately affected. Due to job losses, as well as an increase in caregiving responsibilities since Covid, many women have faced unprecedented challenges in the workforce.
For women entrepreneurs, these challenges have been particularly tough. Many are facing additional obstacles in accessing funding and therefore missing out on much-needed support for their businesses.
As the pandemic continues to affect the economy, it is important to address the funding gap for women entrepreneurs. They must be provided with the resources and support they need to succeed, and must not be treated any differently to their male counterparts.
In this article, I will explore the impact of the pandemic on female founders and offer solutions to address the funding gap.
Challenges facing women entrepreneurs
Female entrepreneurs have faced numerous challenges since the pandemic took hold. These have ranged from limited access to funding, to increased caregiving responsibilities. According to a survey by the National Women’s Business Council, as many as 90% of women-owned businesses reported being negatively impacted by the pandemic. Many of these women experienced decreased revenue and increased financial stress.
One of the key challenges facing women entrepreneurs has been limited access to funding. Women entrepreneurs already faced significant barriers – compared to men – and the economic downturn has only made this issue more acute. According to a report by PitchBook and All Raise, which is a non-profit organisation that supports female founders, the national picture looks incredibly stark and bleak: In 2022, all-female teams received just 2% of venture capital funding.
In addition to limited access to funding, women entrepreneurs have also faced increased caregiving responsibilities. With schools and childcare facilities closed, or operating at a reduced capacity, many women have had to juggle work and family commitments. This has made it even more challenging to start or grow a business.
Solutions on how to address this funding gap
To address the funding gap, there are several solutions which investors, companies and policymakers can implement.
First, investors can prioritise diversity in their investment decisions. By actively seeking out female-led start-ups, and investing in diverse teams, investors will help to address this gap, while promoting more equitable outcomes. Investors should be aware of their own biases and work to overcome them. Research has shown that unconscious bias can play a significant role in decision-making.
Second, companies and organisations can play a role in supporting women entrepreneurs. This can include creating more opportunities for mentorship and networking. Companies could also promote more flexible work arrangements and provide support for employees with caregiving responsibilities. This will help female entrepreneurs to balance work and family responsibilities.
Finally, among the actions which policymakers could take to address this funding gap, would be to create special provisions for female-led businesses. They could implement policies to promote diversity and inclusion. For example, policymakers could establish mentorship programs or provide tax incentives for individuals and companies that invest in female-led start-ups. They could also stipulate that venture capital firms had to disclose the extent of diversity within their portfolios.
Supporting female entrepreneurs is important
It is not only important for promoting gender equality, but it also has broader benefits for the UK economy. Female-led businesses have been shown to drive innovation and economic growth, while an increase in the number of women entrepreneurs would help to promote a more diverse and inclusive start-up ecosystem.
In addition, women entrepreneurs have been particularly innovative during the pandemic, with many adapting their businesses to meet new needs and challenges. For example, a number of women entrepreneurs have pivoted to produce personal protective equipment or develop new healthcare technologies to combat the virus. By supporting these entrepreneurs, we would not only promote gender equality but also boost economic growth and innovation.
The Covid pandemic has created unprecedented challenges for entrepreneurs, which makes addressing the funding gap more important than ever. Therefore, there is a pressing need for decision-makers to prioritise diversity, by providing greater resources for female-led businesses. They must also implement policies that promote gender equality.