The Female F(o)unding Dilemma
With the rising limelight of female entrepreneurs, it is easy (and good) to feel encouraged about the progress in the business world towards diversity and more gender-equality in the workplace in the UK.
However, when looking at the cold and hard facts, we must come to realise that we still have a long way to go to achieve an environment that allows female-led businesses to thrive in the same degree.
The British Business Bank Equity Tracker Report 2023 shows the significant discrepancies between funding received by female-led vs. male-led businesses. Whilst all female-founder teams raised ￡232m in 2023, their all-male counterparts raised a staggering ￡6.5bn, meaning woman only secured 8.2% of all deals in 2023, showing only little improvement over the past decade.
In conversation with Elin Haf Davies, who has successfully founded, scaled and exited Wrexham based Aparito, a med-tech business building a software platform to support patients taking part in global clinical trials, we are discussing her first-hand experience as a founder in the tech world and the change, that is still needed to support female founders moving forward.
In your opinion, what are the contributing factors leading to the results in the British Business Bank report?
Part of the reason is that less woman compared to men may want to start a business that requires investment – and therefore you may have a slightly smaller pool of woman coming through. There is also a perception that women are more likely to start a lifestyle business or that they are more risk averse. But that only accounts for a very small part of the problem in my opinion. The main problems are that female founders are judged through different lenses than male founders, Investors are more likely to invest in people that look and speak the same way as they do and as there are very few women on the investment side too it becomes an echo chamber.
Do you feel that the tech/ healthcare sectors are especially inaccessible for female founders? If so, why do you believe this is?
We were falling between two funds – we weren’t quite tech and we weren’t quite life science which made it even harder.
Both sectors are just also inherently male dominated so while female founders might be honest in their decks/ answers, they get compared to a lot more bravado and noise which sets unrealistic expectations.
What has set you and Aparito apart to be able to achieve the funding you have?
Our investors were essentially social impact investors who bought into the mission as much as the financial return.
Thankfully we were able to hold true to our mission and give them a healthy return.
What can be done to close this gap in the future?
To achieve the economic growth and resilience that we need, we need to ensure that 50% of the population are fairly invested in. Data also tells us that women build better businesses in terms of social/ environmental impact and financial returns. I would be in favour of redacting the team profile for names/ gender/ identity for initial screening as a starter so that we at least get a fair chance of getting through the door. Maybe we should also mandate that all funds must invest 30% of their funds to female founders by 2030 to echo some of the 30% Club aspirations.
While quotas are not perfect it would at least help to force the needle.
Elin Haf Davies, Aparito
