Female founders get less than 1p for every £1 VCs invest in UK startups

Inequality persists as women-led startups receive less investment than male counterparts, effectively missing out on billions of pounds in funding, according to a government report

Female founders get less than 1p for every £1 VCs invest in UK startups

Launching a startup as a woman is far from easy. Gender inequality is an old epidemic and, disappointingly, women today are still bearing the brunt of sexism – whether it’s to secure funding or convince VCs of their value. While VC funding has been gradually increasing for female founders, British Business Bank research highlights that this progress is moving slowly. 

The report was commissioned by chancellor Philip Hammond for the 2017 Budget and saw 45 VC firms assessed over 4,000 pitches. It showed that for every £1 of VC investment in the UK, female-founded startups get less than 1p. Comparatively, all-male founding teams received 89p and mixed-gender teams got the remaining 10p. This means that men-led ventures received roughly £5bn in investment. The report also suggested that if the progress continued at the current rate, it will take more than 25 years for female-led companies to reach even 10% of all VC deals.

Furthermore, the report said the main obstacle was a result of fewer women being seen by the investment committee. Indeed, 61% of VC firms didn’t see any all-female teams in 2017 and 24% didn’t see any women at all. However, 75% of investment pitches were from all-male teams, plummeting to 5% from all-female teams.  

Commenting on the report, Liz Truss, the chief secretary of the Treasury, said: “It’s incredible that in 2019 men seem to have a virtual monopoly on venture capital. We need more investment going into startup 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.” 

While the research figures are disappointing, hopefully government intervention will lead to progress within this business sector. In 2019, it’s about time women had the support to bring their ideas to fruition and it’s why research into the industry is fundamental in order to make a change. 

Louisa Cook
Louisa Cook

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