Fixing the gender gap in start-up businesses
New initiatives aim to remove barriers for female entrepreneurs. David Prosser reports.
![Three women standing in an office](https://cdn.mos.cms.futurecdn.net/N9a4mTYtiVGtkcUoBBiapU-415-80.jpg)
International Women’s Day prompted a slew of announcements from campaign groups supporting female entrepreneurs and small-business owners. But while more women than ever before are launching businesses in the UK, the government’s research continues to point to a huge gender gap.
The 2022 Rose Review found that 140,000 companies were established by all-women teams last year, the first time that numbers have outstripped male-led companies. The number of women launching new businesses is growing by a third each year, with young female entrepreneurs increasing in number particularly rapidly.
However, the Rose Review – first launched in 2019, when ministers asked NatWest chief executive Alison Rose to review female entrepreneurship – also notes that women’s small-business ambitions were more likely to have been disrupted by the Covid-19 pandemic than those of men. Female entrepreneurs spent twice as much time discharging caring responsibilities during the crisis, and received only a fraction of the funding from equity investors that their male peers were able to access.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Ministers hope new initiatives from the Rose Review will support female entrepreneurs further. They include a new campaign to be led by the Women Angel Investment Taskforce, which will encourage more women to become business angels and then to support female business founders. There are also plans to expand networking and mentoring schemes.
On financing, ministers have announced a campaign to persuade more financial institutions to sign up to the Investing in Women Code. This requires firms to publish data on the diversity of their small-business funding, and to appoint a senior leader with responsibility for supporting equality. Some 134 firms with capital of almost £1trn have signed so far.
The funding gap
Such funding will be critical to helping more women fulfil their ambitions, with a lack of finance often frustrating female founders. Research published this week by Small Business Britain, a lobby group, suggests as many as 17% of women are keen to start a business following the pandemic, up from 15% a year ago. However, finance for these women remains in short supply – research suggests that women in the UK start out, on average, with 53% less capital when starting new businesses. Male entrepreneurs are 86% more likely to be funded by venture capital.
The problem is not confined to the UK. Across Europe as a whole, female founders have secured just 1.3% of all venture capital funding available since 2017, with many complaining about the unconscious bias of all-male investment teams.
The more positive news is that there are growing resources to turn to for women looking for advice and support as they try to get new ventures off the ground. Startups (startups.co.uk) lists more than 20 groups with bespoke services for women. These range from accelerators and investment houses such as the AllBright Collective and Female Founders Accelerator, to networks such as the British Association of Women Entrepreneurs and the Female Founders Network.Many of these groups also provide support for female business owners once their ventures are up and running.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.
-
Regulator moves to protect access to cash amid branch closures and disappearing ATMs
News The Financial Conduct Authority has told banks to start assessing if local communities have adequate cash access from mid-September
By Marc Shoffman Published
-
VAT hike on private school fees could come earlier than previously expected
The government could start charging VAT on private school fees as soon as January 2025, according to the latest reports. What does it mean for parents?
By Katie Williams Published
-
Could the new Growth Guarantee Scheme help boost your business?
The new government-backed Growth Guarantee Scheme is aimed at helping businesses recover from the pandemic. Is it worth considering and are you eligible?
By David Prosser Published
-
Revolut founder Nik Storonsky cashes in – what's next for the fintech billionaire?
Nik Storonsky has shaken up the banking industry with Revolut. He is now preparing a new project that could do the same to the venture capital sector
By Jane Lewis Published
-
Is local production making a comeback?
Companies return production closer to home and shorten their supply chains due to the pandemic and geopolitical turmoil. How should investors react?
By Dr Matthew Partridge Published
-
French election: an unexpected win for the left-wing
The snap French election delivered a stalemate. What does this mean for the country's stability?
By Dr Matthew Partridge Published
-
Business owners watch out for capital gains tax reforms
If you plan to sell your firm, look out for changes to capital gains tax rules by the new government
By David Prosser Published
-
How businesses can cut energy costs and boost efficiency
Here's how small businesses can monitor energy costs even though they don't benefit from the Ofgem energy price cap.
By David Prosser Published
-
What could a general election mean for apprenticeships?
Labour and the Conservatives have competing approaches when it comes to apprenticeships and funding young workers. But how are they supporting small businesses?
By David Prosser Published
-
Is online anonymity a necessity for economic and political freedom?
Online anonymity can be abused by trolls, but it remains central to our economic and political freedom, says Dominic Frisby
By Dominic Frisby Published