Female founders in the UK face significant disparities in equity investment compared to their male counterparts, with a recent study by the British Business Bank revealing that for every £1 of equity investment in 2021, female founders received just 2p, while male founders received 84p. This gender disparity in funding poses a significant barrier to female entrepreneurship.
The Scottish Government’s Pathways report highlighted this issue, pointing out that women receive substantially less investment at all stages of the entrepreneurial journey, which contributes to the lower rate of women starting their own businesses. In 2022, only 12% of Scottish companies that received external investment were female-led, compared to 73% led by men.
To address this imbalance, initiatives in Scotland are working to encourage female angel investment. Angel investors are private individuals who provide financing to small businesses in exchange for equity. Research has shown that women are 50% more likely to support female-led companies, making increased female participation in angel investing a potential solution.
One such initiative is Mint Ventures, a female-led angel investment syndicate in Scotland. Mint Ventures aims to support early-stage female-led firms in securing the capital they need for growth while dispelling the myth that women must be wealthy to become angel investors. Collaboration between organizations like Mint Ventures and financial institutions can help raise awareness of these opportunities and bridge the knowledge gap among potential investors and founders.
By increasing the participation of women in angel investing, finance markets can evolve in the right direction and provide female-founded businesses and entrepreneurs with the necessary financial support to thrive. Closing the gender gap in entrepreneurship and investment is essential for fostering diversity and innovation in the business world.
