Female Founders, Equality and the Future Fund

Female-led startups only achieve 1p in every £1 invested in the UK.

1p.

Almost all of it, a mind-blowing 89p of it goes to all male teams based on making 75% of all pitches.

This is a non-COVID19 data point.

If your immediate response to this is that the imbalance is due to male-led startups being a more lucrative investment, you are sadly mistaken. It still comes down to unconscious bias and the old adage of network, and unfortunately women are less likely to be in the right networks to get the warm introduction. I’m not saying you can legislate for equality of result but equality of being considered should really be a given especially when the data tells us that women are exceptional leaders who significantly outperform their male counterparts (this is shown in a number of studies including one conducted by First Round Capital), generate a higher return (a Ewing Marion Kauffman Foundation study showing a 35% differential), and 4x more women are forming companies than their male colleagues.

1p.

The data just doesn’t track.

We expect to see the opening of the Future Fund next week. The criteria is still yet to be fully confirmed. Some are predicting an oversubscription on a first come, first served basis. Others a lukewarm uptake and more reliance on existing supporters. Either way, you can’t help but get the feeling that yet again the odds will not fall in the female founders’ favour. Beauhurst has already highlighted that just 27% (7,629) of the 28,499 ambitious startups they track are eligible. That’s 27% of all startups, do the math. It’s not looking great.

I have previously gone on record to say I am a supporter of the Future Fund and I stand by that. It’s the right tool for a very specific job. Where the wheel comes off is that there is only one tool in the toolbox. And everyone knows that you can’t build a house with a single spanner.

Those startups who can’t access this funding will either find their own way or die. But you can clearly see the injustice here because for female founders (and BAME founders for that matter), the playing field was never level to begin with.

I trust that BBB will be diligent with their diversity mapping and transparent with their Future Fund data. I hope that when the Future Fund is up and running some funds will be ring fenced or created to support the ineligible (who form the majority). I pray that the work, albeit small steps, done by so many men and women in this community to try and address the huge access to capital disparity wasn’t for nothing. I fear that the data next year will still show that female-led startups only achieve 1p in every £1 invested in the UK, rounded up to the nearest whole pence.