The Investing in Women Code shows slight improvement for female founders.
- The code increased female-founded company deals by only 4% over the market average.
- More signatories have joined, yet male-founder deals still dominate funding.
- Despite setbacks, angel investors demonstrate promising progress for female founders.
- Calls for collective action continue to promote financial equity.
The Investing in Women Code, a government initiative aimed at increasing funding accessibility for female entrepreneurs, has shown limited progress according to the latest report by the Department for Business and Trade. The scheme, established in 2019 following the Rose Review’s findings on financial barriers for female entrepreneurs, has thus far succeeded in increasing deals for female-founded companies by only 4% above the market average of 28%. This brings the share of such deals to 32% among signatories, which is a decline from the previous year’s 35%.
Even with the increment in participating firms from 204 to over 250, the majority of venture capital (VC) deals, a significant 68%, are still being allocated to male-founded companies. This ongoing disparity highlights the entrenched challenges within the venture capital landscape and indicates that the voluntary commitment by signatories to improve women’s access to funding needs further impetus and refinement.
The code encourages its signatories, which include prominent entities such as British Business Bank and UK Finance, to report annually on the gender distribution of their investments. This transparency is meant to drive accountability and progress towards equitable funding practices. However, as noted by British Business Bank CEO, Louis Taylor, while some advancements have been made, a substantial gap remains. Taylor emphasises the necessity for collaborative efforts to enhance financial inclusivity and spur innovation and growth across the UK economy.
On a more optimistic note, Jenny Tooth, executive chair of the UK Business Angels Association, highlighted a positive trend among angel investors. She revealed that for the first time, deals involving female founders have outpaced those involving male founders within their group of angel investor signatories. This development suggests that angel investors could be leading the charge towards better representation and support for women in business, providing a potentially transformative model for other investment sectors to emulate.
In conclusion, while the Investing in Women Code has fostered some progress, persistent gender disparities in venture capital funding necessitate ongoing efforts for significant change.
