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Gender Disparity in Venture Capital Investment: Is Progress Possible?

In the fast-paced world of venture capital investment, where groundbreaking ideas are transformed into thriving businesses, equal opportunities for entrepreneurs to secure the funding needed to bring their dreams to life are crucial. However, a recent report by the British Business Bank sheds light on a troubling reality: a persistent gender disparity that hampers progress in the industry.

Despite efforts to promote diversity and inclusivity, female founders face significant challenges in accessing funding, with little improvement observed over the past decade. This gender imbalance calls for urgent attention and a concerted effort to bridge the gap, allowing diverse entrepreneurs to thrive and contribute to economic growth.

The British Business Bank report, Finding What Works: Pathways to Improve Diversity in Venture Capital Investment, presents a comprehensive analysis of the state of diversity in venture capital. It highlights the challenges faced by women, people from ethnic minorities, and those from lower socio-economic backgrounds in accessing venture capital funding compared to their male or white counterparts.

Examining the data, the report reveals that the share of total equity investment by value for all-female founder teams remained stagnant at a mere two per cent over the last 10 years. Although the share of equity deals to all-female founder teams showed a slight increase from five per cent in 2011 to nine per cent in 2022, the funding allocated to these teams did not witness a corresponding rise, indicating a persistent imbalance.

Disappointing data
Lottie Wells, Wirex.
Lottie Wells, senior PR & comms manager, Wirex

These findings resonate with Lottie Wells, senior PR and communications manager at payments platform Wirex.

“It’s disappointing to see that VC female founder teams have not received significant investment, and it can be difficult to know why, since there is ample evidence suggesting that there is enough female talent in the VC sector.”

Wells points out that certain sectors, such as fintech and crypto, have long-standing stereotypes that predominantly feature males, making it challenging for people to recognise the presence of female leaders, innovators, and venture capitalists.

‘Clear, actionable, and evidence-based pathways’

Despite the discouraging numbers in the British Business Bank report, there are some positive signs of progress. In 2022, 13 per cent of first-time equity deals went to all-female founder teams, demonstrating an

Louis Taylor, CEO of British Business Bank
Louis Taylor, CEO of British Business Bank

improvement in the investment pipeline. Additionally, 10 per cent of first-time equity deals were awarded to all-ethnic minority teams, signifying a growing recognition of diverse talent within the industry.

The journey of raising venture capital can be challenging – but for underserved entrepreneurs, the barriers can be far higher and this needs to change,” says Louis Taylor, CEOBritish Business Bank.

Our report provides clear, actionable, and evidence-based pathways for UK funds to improve diversity in investment, which I hope will stimulate both discussion and action to improve outcomes for diverse entrepreneurs and the wider UK economy.

“Together, we can create the systemic change needed to unlock the full potential of talented UK entrepreneurs, wherever or whoever they are.”

Recommendations and implications

To address the gender gap and enhance diversity in venture capital investment, the report suggests several actionable pathways:

  1. Promoting diversity in decision-making: Diversifying the composition of venture capital firms, particularly at senior levels, can lead to more inclusive investment decisions. Creating an environment that embraces diversity enables better support for diverse founding teams.
  2. Fostering inclusion in the investment pipeline: Venture capital firms should actively seek out and provide equal opportunities to underrepresented founders. Initiatives such as networking events during office hours and engagement with accelerators can help identify and support promising business propositions from underserved groups.
  3. Embracing transparency and accountability: Transparency within the industry is crucial for driving change and promoting diversity. Venture capital firms should participate in industry-wide surveys, communicate their investment strategies and diversity commitments, and demonstrate their dedication to increasing the proportion of deals with underserved entrepreneurs.
Highlight success

For Wells, it’s also important to put the spotlight on those currently enjoying success.

“The best way to counter this stereotype is to showcase how many successful female VCs there are in the sector,” says Wells. “There are many initiatives such as Wirex’s Rising Women in Crypto Power List which aim to recognise women making exceptional contributions to the crypto sector, including VCs.

“The list has received over 500+ nominations over the past three years, which ultimately will identify and celebrate previously unrecognised women such as VCs in crypto, in the hope that they will receive further funding in the future.”

Wells’ comment echoes the need for change in the venture capital landscape, which aligns with the recent launch of Obu Angel Investment, aimed at increasing diversity and unlocking the potential of underrepresented entrepreneurs.

Co-founded by Sarah King and Claire Dunn, Obu connects eligible women angels and allies with female-founded businesses, providing them with the opportunity to offer funds and expertise.

The platform facilitates the entire investment process, including crucial aspects such as shareholder agreements, articles of association, and Companies House filing.

“Flipping the narrative”
Sarah King
Sarah King, co-founder, Obu

King sheds light on the gender dynamics surrounding financial literacy and representation in the financial services sector. Highlighting disparities from childhood to adulthood, she emphasises the impact of socialisation and gender roles on women’s engagement with money.

“It’s no surprise to see that the financial services sector is dominated by men – 86 per cent of angel investors, 83 per cent of financial advisors, 94 per cent of CEOs in the financial services sector are men. This underrepresentation of women impacts the way in which financial services products are designed, creating a missed opportunity of $700billon a year globally.

“At Obu, we’re flipping the narrative that suggests women need to fit into the products offered and instead we’re unlocking this huge untapped potential by asking ‘how might we deliberately design products for you’?”

In addition to connecting founders and angels, Obu leverages technology to address common pain points experienced during investment rounds. The platform clearly identifies active angels, sets out funding expectations, limits, and timescales, and employs accessible and straightforward language

“We’re building a new table and we’re welcoming eligible women and ally investors who recognise the need for change to pull up a chair,” adds King.


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