New report reveals only 15% of all equity funding is received by female founders

The Female Founders Forum report in partnership with think tank The Entrepreneurs Network has revealed only 15% of all equity is received by female founders, along with other important insights into the state of female entrepreneurship in high impact sectors. (These venture capital firms for women however, are working to change that.)

These include an evident funding gap between male and female founders, the latter raising just 15% of all equity funding, a shortfall of £1.6bn per year in comparison to funding being allocated proportionately between genders.

The report also concluded that if women founded companies as frequently as men, the UK economy would be £250bn better off.

Commenting on the necessity to close the funding gap, report author Aria Babu, Head of the Female Founders Forum, said:

Women start businesses with on average half as much money as men do, as they are less likely to take out personal loans or use savings. Equity finance is critical in high-tech sectors where rapid growth is a priority and the path to commercialisation and profitability can be long.

What is the Female Founders Forum?

Established in 2016 the Female Founders Forum is a community of the UK’s brightest and most successful female entrepreneurs, and was set up by the think tank The Entrepreneurs Network (in partnership with Barclays) to support, advocate and encourage female entrepreneurship.

It has published several insightful reports regarding the state of female entrepreneurship, with the most recent report, Inspiring Innovation, focusing on female entrepreneurship in high-growth, high-innovation sectors.

Female founders leading the way in Greentech

The report also revealed positive insights, that include female-founded businesses now receiving greater funding than all-male ‘Greentech’ founding teams. Since 2018, £2.8bn in equity finance has been raised by female-led companies in the sector.

34% of businesses in GreenTech are now female-founded, raising 42% of all equity funding across the industry. This is a healthy, encouraging number compared to other areas, like AI, which remains consistently low with just 2% of funding being received by female founders.

What is Greentech and why is it important?

Greentech is an incredibly critical, high impact sector, consisting of companies striving to bring us all closer to net zero emissions through the use of technology.

As the run up to the COP26 summit edges nearer, and with the UK government confirming its plans to slash emissions by 78% by 2035, and achieve net zero emissions by 2050, the importance of continued growth in this sector is vital.

As is the importance for every business to adopt these five strategies to cut emissions in order to become more sustainable.

Leading the way in this sector is Greentech business Greyparrot, a female-led company that uses AI to help businesses deal more sustainably with their waste.

To date, they have raised £4.1m in funding from investors and its CEO Mikela Druckman attributes her success to the importance of role models and supportive peers – “I was incredibly inspired by examples of women who had to break barriers in their fields, and I knew that I wanted to be able to do the same for the next generation.”

For further insight, read the full Inspiring Innovation report.