Women entrepreneurs discussing

Can the UK really become the “best place in the world” for women entrepreneurs?

As happens every year at this time, businesses of all sizes and from all industries express their appreciation for their female stakeholders and reinforce their commitment to gender equality. Why? It was International Women’s Day.

But, an annual appreciation of the role of women in business needs to be supported throughout the year with positive action and there are some encouraging developments.

The Department for Business and Trade has just launched the Invest in Women Taskforce to tackle the shortage of equity capital and debt available to women who are building businesses. Its first job is to create a £250m funding pot through collating various sources of capital. Led by entrepreneur Debbie Woskow and Barclays’ head of business banking Hannah Bernard, its mission is to: boost angel investment for female-led businesses; enable more women to become angel investors, increase access to finance for women; and boost micro-funding. Alongside the launch, Rishi Sunak said he wants the UK to be the ‘best place in the world’ for women to start a business.

There is work to do. Female founders received just 2%, or 2p for every £1 invested, of VC funding across all industries in 2021(UK Treasury 2021) despite women-owned businesses representing 18% of all UK SMEs (Women and the Economy, UK Parliament). This despite that, if women started and scaled businesses at the same rate as men, £250bn would be added to the UK economy (The Alison Rose Review of Female Entrepreneurship 2019).

Earlier this month swathes of media covered the Chancellor’s reversal of his decision (only announced in January) to raise the income threshold that defines so-called high net worth individuals from £100,000 to £170,000. In doing so he disproportionately impacted the already very limited number of female angel investors in the UK and therefore further limited the already woeful access to funding that female-led companies are likely to receive. The overwhelming backlash to the move – it goes without saying that nobody would benefit from this, not entrepreneurs, not society and certainly not the UK economy- forced the Chancellor’s sharp U-turn.

However, it is not just female founders who are struggling with the system. On the other side of the funding equation, the financial services sector’s moves towards gender parity have been slower than hoped and expected. Whilst the proportion of women holding senior roles has increased – to 35% from 27% in 2016 when the Women in Finance Charter was put in place – it is still frustratingly slow progress at one percentage point annually. There has also been a ‘disappointing lack of progress’ across other areas and as quoted by Dame Helena Morrissey ‘big pockets of no progress whatsoever’.

Whilst all this makes for slightly depressing reading, the creation of the Invest in Women Taskforce is one encouraging sign for the future.. An even bigger one is that despite funding challenges and legacy structural inequalities, a record number of women are choosing to start their own businesses. A fact worth celebrating every day.