Women-led businesses are on the rise. Why aren’t investment values keeping pace?

Women are setting up and scaling businesses like never before. In 2022, women in the UK established over 150,000 new companies – more than twice as many as in 2018, according to research in the Rose Review progress report 2023.

The trend is pronounced among younger age groups. Women between the ages of 16 and 25 founded nearly 17,500 businesses in 2022 – that’s more than 22 times the equivalent figure for 2018.

It is a trend that is also witnessed in Ireland, which has one of the highest rates of early-stage female entrepreneurship in Europe, according to Global Entrepreneurship Monitor. Lauren Sharpe, an investor in BGF’s Dublin team, recently highlighted some of the exceptional female entrepreneurs at work in Ireland.

Partly as a result of these newer female-founded startups, women are in charge of a growing proportion of businesses. In the UK, a fifth of all businesses are led by all-female teams, according to the Rose Review.

But when it comes to business investment, research reveals an unequal picture. In the UK in 2022, just 2% of pounds deployed via announced equity investments went to all-female founding teams, according to The Deal 2022 report by Beauhurst.

That’s despite a rise in the number of investment deals completed by women-led companies. In 2022, all-female founder teams accounted for 9% of announced equity deals, while mixed gender founder teams accounted for 18%, according to Beauhurst.

The disparity is likely explained by the size of the businesses involved. Women are more likely to be the founders of startups and early-stage businesses, while growth-stage businesses, which can command bigger investment values, are still largely run by men.

In the run up to International Women’s Day, we asked BGF staff – both female and male – for their thoughts on the gender imbalance in equity investment.

“I really believe that to increase funding going to female-led businesses, we must do better in attracting female talent into our investment teams and, even more importantly, to retain them as they become senior decision makers,” says Linda Nguyenova, investor.

Watch the video below to view everyone’s contributions. For more detail, visit our page on investing in women-led businesses.