The UK may be the start-up capital of Europe, but not when it comes to women.
Less than halfway into 2019, 10 companies founded by women had become unicorns. In all of 2018 there were 12 unicorns born with at least one female founder. The first female-founded company to gain unicorn status in 2019 was FabFitFun.
In 2019, the percentage of startups with at least one woman on the board of directors is 40%. To uncover this fact, Silicon Valley Bank surveyed nearly 1,400 technology and healthcare founders and executives, mostly in big innovation hubs across the US, the UK, China, and Canada.
Women in business: key facts
Only 1 in 3 UK entrepreneurs is female: a gender gap equivalent to 1.1 million missing businesses. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as UK men. Even if the UK were to achieve the same average share of women entrepreneurs as best-in-class peer countries, this would add £200 billion of new value to the UK economy (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Women in the USA are twice as likely to be entrepreneurially active as women in the UK. The entrepreneurial rates for men are roughly the same in the UK as the US, any significant increase in business formation will only come from encouraging more women into business. (Harding, R., ‘State of Women’s Enterprise in the UK’ Prowess, 2007)
Female-led businesses grew by 58% from 2007 to 2018. The US economy has been improving at breakneck speed. Women entrepreneurs statistics indicate that businesses owned by women generate $3.1 trillion in annual revenue and that this success goes hand-in-hand with a political upheaval: the gradual bridging of the wage gap and a record number of women elected to state and national office in 2018.
Access to finance
Around one third of women say access to funding is the biggest barrier to starting a business, compared to 20% of men. A similar proportion cite funding as a barrier to scaling up an existing business. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Only 1% of all venture funding goes to businesses founded by all-female teams, inhibiting scale up (UK VC & Female Founders, report, February 2019.)
USA - For every dollar invested, businesses founded by women generate revenue almost two times higher than those founded by men. In a study of more than 350 startups, Boston Consulting Group found that women-owned businesses are often a safer bet for investors and financial backers. The study reveals the literal price of prejudice.
Women-led businesses achieve far lower levels of equity investment, with male entrepreneurs 86 per cent more likely to be venture-capital funded, and 56 per cent more likely to secure angel investment. However, when they do secure investment, women’s businesses show returns of 20 per cent more revenue with 50 per cent less money invested (Untapped Unicorns, Female Founders Forum/ Barclays 2017)
One reason women-led businesses receive less venture capital may be that only 9% of VCs are women. A 2018 study published in the Academy of Management Journal found that investors (both men and women) are more likely to ask female entrepreneurs “prevention” questions, whereas male entrepreneurs receive “promotion” questions. Investors are more concerned about potential losses with women, but they want men to tell them all about their ambitions and the growth potential of their businesses.
Women were 55% more likely than men to cite fear of going it alone as a primary reason for not starting a business. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Women are less likely to believe they possess entrepreneurial skills: Only 39% of women are confident in their capabilities to start a business compared to 55% of men. This is a perceived gap in ability, rather than an actual gap in skill sets. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Women are twice as likely as men to mention family responsibilities as a barrier to starting a business. In addition, for female entrepreneurs with children, primary care responsibilities are the #1 barrier to further business success, with 46% of female parent entrepreneurs identifying it as a “very important” or “important” barrier versus 33% of male parents with businesses. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
What can we do?
We can promote and honor the victories and revolutions being engineered by women from across the digital sector!
Do you believe that having a gender balanced workforce across the digital (and tech) sector reinforces the sector's ability to retain its market position as the cornerstone of industry across global markets?
Take part, make a difference, have your say…
We’re hosting another event - Women in Sales – providing a platform for all to support gender equality - https://www.eventbrite.co.uk/e/women-in-saas-sales-tickets-75281869097?aff=Emma
Join us in London on the evening of 5th November
Groups and Communities, you can also join
References and sources
Achieving gender equality requires the engagement of women and men, girls and boys. It is everyone's responsibility. Ban Ki-moon