This post takes a closer look at the status of female founders and angel investors, uncovering the stats on our platform. It also shines a light on some startups addressing the gender imbalance.
In light of International Women’s day next Sunday, we are looking at SDG 5: Gender Equality. Achieving gender equality is of course a big challenge and attaining it will require different actions depending on a variety of factors ranging from country and societal norms, to educational systems and political landscapes.
Our focus is on how business can address societal and environmental issues. In terms of gender equality, this involves both supporting startups that address issues affecting women, and addressing the imbalances in the startup ecosystem in relation to the number of female-founded businesses and female angel investors. In this post we take a closer look at both these topics.
Reports looking into the status of female entrepreneurship in the UK present a bleak picture. Newable and Beauhurst's 2019 report found that the proportion of pounds invested into female-founded businesses is declining while the Female Founders Forum reported that the percentage of women setting up business continues to remain low: in 2018 it was at 5.2%, compared to 10.5% for the male entrepreneurship rate.
This inspired us to take a look at the data we’ve collected on sign-ups through our parent platform, Angel Investment Network (AIN). Our data also shows huge gender disparities: on the platform only 31% of entrepreneurs and 22% of investors are female. Interestingly, when broken down by age, it is the 45-54 age group that has the highest percentage of entrepreneurs at 37% and conversely the lowest percentage of investors at 14%. Somewhat surprisingly, it is the under-35 age groups which have the highest percentage of investors at around 25%.
After some discussion in the office, these are a couple of our suggestions on why there are fewer female investors and entrepreneurs on our platforms. These ideas of course bring with them the danger of falling into stereotypes and generalisations, so they are not a definitive explanation but rather an opener to a wider discussion on what is needed to change the startup landscape.
- Online platform
AIN is an online, transactional platform designed for raising investment. Whilst this brings with it many benefits, it doesn’t forster the opportunity to speak to other female entrepreneurs or investors who have used the platform or provide skills and support that are gained through, for example, an accelerator programme. This is combined with the cost of uploading a pitch on AIN, which may act as a further barrier.
- Lack of networks
Female entrepreneurs and angel investors may not have access to or be part of the traditional networks open to their male counterparts. These networks can be an invaluable way to share ideas, advice and connections which are vital to grow a business or find solid investment proposals. Although more networks are starting to emerge, such as Angel Acadame and Blooming Founders, there is still a long way to go.
Combined, these two reasons mean more efforts are needed, both online and offline, to increase the number of female entrepreneurs and investors and re-address the gender balance. For more about readdressing the balance read these articles featuring Liv in The Guardian and Elite Business.
So what are we doing to change these figures?
- Celebrating Founders
Underneath all the stats, there are, of course already many fantastic startups which are being run by women. On SeedTribe alone, these range from a startup tackling food waste through innovative freshness indicators, to an online platform encouraging conscious consumer choices and ethical business practices. We highlight great profit-with-purpose businesses regardless of whether they have a male or female founder. However, by showcasing female-founded businesses it demonstrates what other women have achieved, and strong role-models are, we believe, an important way to encourage the next wave of female entrepreneurs. In this vein, our parent platform, Angel Investment Network, also displays female founded businesses on their dedicated Female Founders page.
- Celebrating ideas
On SeedTribe, we also support some amazing startups that are directly tackling issues that affect women. These include Blooming Founders, which is breaking down the barriers which hold back female founders and making the startup ecosystem more inclusive and diverse, and Smart Purse, which aims to give women the confidence to talk, understand and feel good about money.
What about moving forward?
Finally, we want to do more to support female entrepreneurs and investors. However we want to know what kind of support would be helpful to you so we would love it if you would complete this entrepreneur poll or angel investor poll. Or if you have any other ideas drop us an email.
In the meantime, check out our SDG 5 page which curates resources and events related to gender equality and has a variety of ways to get involved.