Leading female entrepreneurs and MPs are calling for a change in the way funding is distributed to start-ups in the UK, after figures revealed that female-led businesses receive just one per cent of all funding.
According to the British Business Bank, start-ups with all-female founder teams get less than one per cent of available capital compared to all-male led founders who receive 89 per cent of all investments, the remaining 10 per cent makes up mixed gender founders.
Analyst firm, Pitchbook, revealed that in 2018 female entrepreneurs, secured just £118 million out of a total of £7 billion from the venture capital industry.
Despite a host of diversity initiatives in Britain, female-only founder businesses secured just 1.6 pence of the total, just over 1p in every £1.
Liz Truss, Chief Secretary to the Treasury, said: “It’s incredible that in 2019 men seem to have a virtual monopoly on venture capital. We need more investment going into start-up ventures and more women putting businesses forward.
“The funding process has to be more open, more transparent and more meritocratic.”
Alice Hu Wagner, Managing Director of Strategy and Economics at the British Bank said “seemingly simple solutions” had proven to be flawed because “mandating female decision-makers risks tokenism” while earmarking women-only money does not address “underlying closed networks and experience gaps.
“We need new approaches to address these issues and this report is just a first step.”
Ms Truss added: “Nobody wants their business not to be funded because they’re a woman.
“They want to be judged on the basis of how good their ideas are, how hardworking they are, not the colour of their skin or their gender.”