Advocates have urged the government to bolster venture capital funding for female-founded businesses to better support female entrepreneurs. Research indicates that the UK economy could benefit from the addition of £250billion of new value. However, this is only attainable if women started and scaled new businesses at the same rate as men.
Kelly Devine, President, UK&I, Mastercard, Emma Jones CBE, founder, Enterprise Nation, Karen Licurse, managing director at Digital Boost and Anthony Impey MBE, CEO, Be the Business have penned an open letter to the chancellor, Jeremy Hunt, with recommendations on supporting female entrepreneurs.
Together, they wrote
“Dear Chancellor,
Unlocking UK productivity and boosting growth by supporting female entrepreneurs
“We were pleased to hear you speak about the importance of entrepreneurialism to the UK economy recently. Nowhere is the spirit of entrepreneurship more apparent than in the country’s small and micro businesses, and it’s encouraging to see that more women are setting up businesses than ever before.
“But whether it’s the cost of childcare, the lack of funding given to female founders, fewer role models or limited access to upskilling or supporting networks, if you’re a woman starting a business in the UK today, there are simply more barriers in your way.
“There is a huge economic upside to supporting female entrepreneurs: The Rose Review found that £250billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as men.
“Organisations like Be the Business, Digital Boost and Enterprise Nation, with support from private sector organisations like Mastercard are supporting hundreds of thousands of female entrepreneurs through programmes like Strive UK. This has resulted in free access to training and targeted advice to tackle business challenges.
“But we need a focused effort from the public, private and third sectors, brought together through the convening power of government, to truly tackle the range of issues facing female founders in the UK.
“Earlier this week over 100 industry leaders from finance, technology and the entrepreneurial support system came together to come up with solutions. Ahead of the Budget, we’re calling on the government to support female entrepreneurs through six recommendations.”
Six recommendations
1. Encourage a much-needed increase in VC investment for female and ethnic-minority-founded businesses
- Creating a specific Enterprise Investment Scheme for female-founded businesses, so that VC investors receive tax breaks when they support female founders. The scheme could replicate the existing Enterprise Investment and Seed Enterprise Investment schemes and should include quotas for ethnic-minority led businesses.
- Taking the schemes out of the party-political system and making them permanent, to provide long-term security to founders and certainty to investors.
2. Create a new fund
Co-funded by the private sector and led by the British Business Bank to provide finance to female entrepreneurs, the fund will help those who find it difficult to source investment below a particular threshold.
3. Launch a cross-governmental Taskforce
The Taskforce will look at childcare costs and maternity and caregiver leave for female entrepreneurs. As well as supporting small businesses across the country to support employees with parental leave. We encourage a specific focus on women from ethnic minority backgrounds.
4. Automatically receive information on accredited funding, banking and support services
Female-founded businesses who register with Companies House and HMRC should automatically receive information on accredited funding, banking and support services, such as how to access a start-up loan, where to go for free training on topics like social media marketing, and how to get free targeted business advice.
5. Identify gaps in support
Improve gaps in data by creating a national database on female-founded businesses, and those led by ethnic-minority founders, as well as the unique challenges they face. You can’t improve what you don’t measure, so this would help the public and private sector identify gaps in support.
6. Trade missions for female-founded businesses,
This includes more digital trade missions to help female entrepreneurs, including females from ethnic minority backgrounds, trade around the world.”
The letter concluded:
“Finally, only through effective partnerships between the government, private sector businesses, and third-sector partners can we truly level the playing field for female founders from all communities and backgrounds and unlock the full potential of the UK economy.”
Steps to remove gender disparities
The letter has not come out of left field. Proof of a need for help has come from Nucleus Commercial Finance (NCF). In August 2022, NCF conducted a survey of 2,000 people in business. It found that only a third of respondents said their employers offer enhanced maternity leave benefits or flexible arrangements for working mums.
Speaking on these findings, Chirag Shah, CEO and founder of NCF, says: “While we’re seeing positive improvements when it comes to women in business, there is still major work to be done. There is a long way to go before achieving total equality.
“Recent reports have shown female entrepreneurs in the UK launch their businesses with 53 per cent less capital than men. Additionally, a lack of access to funding is one of the biggest challenges they face. Especially, when deciding to start their own company, as opposed to men.
“The lending industry must also play its part. That’s why as part of our offering, we are introducing a discount on loans to companies with a female director. Our ambition is to encourage businesses with female leaders to maximise their potential. Additionally, we want to ensure they are doing so with the appropriate financial backing in place. It’s by no means a silver bullet, but hopefully a step in the right direction.”
