How female entrepreneurs can overcome barriers to fundraising
It is estimated that if there were as many female entrepreneurs as there are male entrepreneurs, global GDP could rise by three to six per cent, adding up to $5 trillion to the economy.
Furthermore, companies with greater gender diversity are 15 per cent more likely to outperform above their respective national industry medians in financial returns.
A new paper from the British Business Bank has revealed that, out of the £5.6 billion of venture capital invested in 2017, 89 per cent went to all-male founded businesses. This was backed up by the Alison Rose Review of Female Entrepreneurship, which detailed that women are 90 per cent less likely to secure funding compared to male founders, receiving just one per cent of VC capital.
These figures are shocking and evidence of the detrimental impact unconscious gender bias is having on the economy. But while we know a systematic change is needed, we also recognise that it takes time to cut through the noise and identify real, tangible solutions to help women-led businesses fulfil their potential.
Jenny Tooth OBE is one person driving change, with the launch of the Northern Women Angel Investment Forum to address the impact from the investor-side of the table. Speaking at our recent ‘Smashing Barriers: Manchester’s Wonder Women’ event, Jenny explained how severe the lack of women entrepreneurs accessing angel investment is and, out of the 15,000 angels she works with, just 15 per cent are women.
She told us that what is needed is access to more information and advice for women on how to engage angel investing and more support for female entrepreneurs on how to access the right funding.
Peter Carway, investment director at Praetura Ventures, says the investor is keen to invest in a diverse range of businesses and founders but that there is a lack of female-led businesses approaching them for investment.
However he recognised the need to “educate ourselves” on how it can best support female founders in achieving their ambitions – such as engaging in events and mentoring programmes run by the likes of GC Angels.
So what are the key barriers that female entrepreneurs are facing today – and how can they overcome them?
- Be aware of timewasters – a lot of people will take an interest in your business and plans, but not always for the right reasons. As an entrepreneur trying to start a successful company, your time is precious so use it wisely on the right people.
- Be selective – especially relevant to niche businesses, it is important to find the right investor for you. After all, you are inviting these people to be your business partner, so make sure you take the time to find the right match for you. Don’t just say yes to the first one you meet and don’t ever be afraid to walk away if it isn’t right.
- Be resilient – starting out is never easy and the chances are the vision you have at the start isn’t always where you end up 6-12 months down the line. You will hit stumbling blocks, goal posts will change and there will be good and bad days. Be kind to yourself, celebrate the wins and build up the resilience you need overtime.
- Be brave – there are always a million reasons not to do something. New things are scary, especially starting a business and putting your ideas, passion and products out there for the first time. Jump in with both feet, otherwise you’ll literally never know!