Twice as many women than men struggle to grow businesses in the UK
YFM Equity Partners has today released new data from its inaugural Entrepreneur Economy report, showing that twice as many female entrepreneurs (54%) than men (28%) are struggling to grow their businesses. This is despite the fact that women generate £122bn in annual revenue towards the Entrepreneur Economy.
The findings also show that more than half (53%) of female entrepreneurs in the UK find the process of setting up a business challenging, compared to 39% of men. YFM Equity Partners’ research suggests that barriers to finance could be playing a role in this disparity – 86% of women said they had trouble accessing finance to help grow their business, compared to 76% of men. Meanwhile, 17% of female respondents said that access to finance was one of their primary concerns for growing their business in the next five years.
The biggest barriers to women accessing funding include finding the right investors (36%), a lack of relevant contacts and networks (31%), and limited clarity on the best funding options for their business (31%). Other reasons mentioned include suffering from unfavourable lending terms (29%) and being told they didn’t have a strong enough business plan (23%).
The report also revealed some interesting differences between female and male entrepreneurs and their preferred way of raising capital. For example, men reported private equity as one of their most preferred methods of funding (27%), while for women private equity was the least used source of funding (21%). This could suggest that there is an unconscious bias preventing female founders from accessing the funding they need to support business growth. Some other methods of funding include:
| Women | Men |
| Personal savings (37%) | Personal savings (40%) |
| Loans from banks/building societies (33%) | Private equity (27%) |
| Loans from the government (23%) | Loans from banks/building societies (25%) |
| Private equity (21%) | Enterprise Investment Scheme (EIS) (20%) |
Despite these challenges, female entrepreneurs remain optimistic about the future of the Entrepreneur Economy, with 58% believing there will be more entrepreneurship in the future. In order to facilitate these hopes, investors need to address the financing inequalities and barriers that are holding female entrepreneurs back from setting up and growing their own companies.
Laura Sisson, investment manager, YFM Equity Partners, comments: “While progress is being made in improving equality in businesses across the country, there are still significant factors causing female entrepreneurs to miss out on growth opportunities, whether this is a lack of networks, finding the right investors, or unconscious bias.
“While an uncomfortable truth, unconscious bias is largely driven by the fact that there is a current lack of diversity within the investment industry and there is less appetite to consider investment opportunities that don’t resemble previous success stories. To deliver change, allyship will be essential and male investors must actively reflect on ways which they and their funds can support female founders, and foster an open and collaborative environment where female founders are comfortable promoting their ventures.”
Zandra Moore, CEO of Panintelligence, adds: “The figures announced today reflect the challenges that many of us have experienced for some time. There is a gender bias when it comes to fundraising which has created a funding ‘gap’ for women, particularly for later stage funding, as well as a lack of local and relatable female-focused networks in the regions.
“Then there’s a lack of visible role models – eight out of 10 people couldn’t name a female entrepreneur when asked! There are also other elements outside of funding and networks: women are less likely to take STEM subjects, for example, which creates a talent pipeline issue, and there’s still a clear caring disparity where women take on most of the responsibility at home. It all combines to create a real set of challenges.
