Beyond the Funding Gap: The Real Crisis in Women's Entrepreneurship

Hello and welcome to We Are Mimosa, where we believe every woman can build a significant business, whether mighty in scale or mighty in impact. Through stories of purpose-driven female founders, we're showing what's possible when women receive the sophisticated guidance they deserve.?

Yesterday, Chancellor Rachel Reeves made a declaration with profound implications for the UK economy: "Defence will be a cornerstone of our industrial strategy." In a rapidly deteriorating geopolitical landscape, this pivot toward national security is understandable. But as billions flow into defense and industrial development, we face an uncomfortable truth: the gender gap in business isn't just persisting - it's turning into a chasm.?

Beyond the Gender Gap – The Chasm is Growing

Six years ago, the Alison Rose Review identified well over ￡250 billion in potential economic growth from closing the gender entrepreneurship gap. Government-backed initiatives like the Investing in Women Code and the Women-Led High Growth Enterprise Taskforce followed, promising to level the playing field.?

Yet in 2025, the numbers tell a different story:?

?? 78% of women-owned businesses turnover less than ￡50k annually—barely equivalent to a mid-level salary.?

?? Just 12% make over ￡100k and a tiny 2% reach the ￡1 million mark.?

?? Government defense spending is soaring - but who's getting those contracts? Not women.?

Three Converging Forces Creating a Crisis for Women Entrepreneurs?

This widening chasm isn't accidental. Three powerful forces are converging to potentially push women further behind in economic power than at any point in recent history:?

1. The UK's Industrial Strategy (Invest 2035)?

The government's draft industrial blueprint prioritises sectors where women entrepreneurs are severely underrepresented: advanced manufacturing, aerospace, defense technology, and clean energy. When policy, funding, and support primarily flow to these industries, women-led businesses are structurally excluded from the country's economic growth plan.?

What's particularly concerning is the complete absence of gender equality proofing in these plans. As publication of the full strategy slips to coincide with the June spending review, there's a real risk that women's economic participation will be treated as an afterthought rather than an essential component of national resilience.?

2. Defense Spending as Industrial Strategy?

The Chancellor's declaration that "defence will be a cornerstone of our industrial strategy" signals a massive injection of funding into traditionally male-dominated sectors. This should be good news for innovative SMEs - but procurement processes overwhelmingly favour established players with existing relationships.?

Consider these striking statistics:?

• Women lead just 16% of SME employers across the UK economy?

• In construction, only 6% of SMEs are female-led?

• In engineering and manufacturing, the figure is below 10%?

• In defense-related industries, women's representation is even lower?

Government contracts typically require businesses to meet certain size thresholds, have established track records, and demonstrate specific capabilities. The vast majority of women-owned businesses simply don't meet these criteria - not because of quality issues, but because structural barriers have kept them from reaching the necessary scale.?

3. AI Disruption and Job Displacement?

While these industrial shifts occur, another seismic change is reshaping the economy: AI-driven automation. Women are disproportionately vulnerable, with the World Economic Forum estimating that 79% of working women are in occupations highly susceptible to disruption.?

This is?creating a perfect storm:?

• Women are being pushed out of traditionally female-dominated sectors by automation?

• Many turn to entrepreneurship out of necessity, not opportunity?

• They enter already crowded fields with limited growth potential?

• They lack the networks and capital to break into high-growth industries?

• The result is what economists call "necessity entrepreneurship" - businesses that struggle to provide even basic income security?

The Geopolitical Context Makes This Urgent?

This isn't happening in isolation. We're witnessing a profound geopolitical realignment that's reshaping economic priorities:?

• The UK just hosted an emergency security summit at Lancaster House with Canada and European allies to chart a way forward for Ukraine?

• The EU has announced an €800 billion plan to "rearm" Europe - the largest defense investment since the Cold War?

• Dramatic shifts in US foreign policy are creating waves across global alliances?

Economic security has rightly become a central government priority. But the current conception of "economic security" doesn't include gender equality in business ownership or financial independence for women. It's focused almost exclusively on supply chains, defense capabilities, and industrial capacity - areas where women-led businesses have historically been marginalised.?

The ￡250+ Billion Opportunity We're Missing?

The irony shouldn't be lost on anyone. At precisely the moment when the UK desperately needs all available economic growth, we're systematically underutilising women's entrepreneurial potential.?

The Alison Rose Review identified over ￡250 billion in potential economic growth from closing the gender entrepreneurship gap - a figure that has surely grown in the six years since. That's a quarter of a trillion pounds in growth potential, precisely what the current government is searching for.?

Yet as Rachel Reeves explores every avenue for economic expansion, this massive potential remains largely untapped. And now, with defense and security taking precedence in both funding and policy attention, there's a real risk that women's economic participation will be treated as a "nice to have" rather than an essential component of national resilience and prosperity.?

Solving the Right Problem: It's Not Just About Funding?

For years, we've focused on funding disparities - women entrepreneurs receive less investment, ask for smaller amounts, and face biases in the venture capital system. While this is true, it's not actually the root cause of the problem.?

The real issue is that women aren't represented in the high-growth, high-productivity sectors where government and private investment are flowing.?

Without structural interventions, the increased defense and industrial spending will widen the economic power gap between men and women entrepreneurs. If women remain concentrated in sectors that receive minimal government support while being largely absent from the sectors receiving massive investment, the gender chasm in business will grow exponentially over the next decade.?

What Would Actually Make a Difference??

Addressing this challenge requires focusing on the right problems and starts with:?

• Gender-conscious procurement policies, like those in the US and Canada, where a set percentage of government contracts go to women-owned businesses?

• Dedicated funding for women in high-growth sectors, ensuring they have access to opportunities beyond traditional "female-dominated" industries?

• Networks and mentorship programs that connect women to the right industries, funding, and supply chains?

• Simplified procurement processes that reduce barriers for new entrants and eliminate male-dominated gatekeeping?

The Women & Equalities Committee Inquiry: A Timely Opportunity?

The Women and Equalities Committee has just launched an inquiry into female entrepreneurship, seeking evidence on the barriers women face and potential solutions. This creates a critical opportunity to influence policy direction.?

In next week's newsletter, I'll share key elements of my submission to the inquiry, focusing on how we can address the structural exclusion of women from high-growth sectors. This is a chance to move beyond surface-level solutions and address the core issues holding women entrepreneurs back.?

Moving Forward: A New Approach to Women's Entrepreneurship?

This isn't just an issue of fairness - it's about economic resilience, national productivity, and sustainable prosperity. An economy that systematically excludes women from its highest-growth sectors is undermining its own potential.?

Over the coming weeks, I'll be exploring:?

• The specific sectors where women face the greatest barriers and why?

• How AI-driven job losses affect women entrepreneurs and what support is needed?

• Policy solutions that could prevent this gender chasm from growing wider?

• A new framework for building significant, sustainable women-led businesses?

The system is failing women. While gaps in investment are real, they are a symptom of a deeper structural issue: women are being excluded from the economic sectors that drive the UK's growth strategy.?

What do you think? Have you faced barriers breaking into high-growth industries? Are funding gaps really the biggest issue - or is the system designed to keep women's businesses small??

I'd love to hear your experiences and perspectives. These conversations help us all navigate these complex challenges with greater wisdom and foresight.?

Until next week, ?

Denyse?

P.S. If you would like to respond to the Women and Equalities Committee inquiry into the barriers women face pursuing entrepreneurialism, please respond to this survey created by Female Founders Rise (a UK community of 9K female and non-binary founders) and Boardwave (a community of 2000 software CEOs and founders in Europe).

About Denyse

Denyse Whillier is a Business Strategist and former CEO who helps ambitious female founders build significant, sustainable businesses. Drawing on 25+ years of executive leadership, she provides the strategic guidance and practical frameworks needed to achieve substantial growth while staying true to purpose and values.

Ways We Can Work Together?

Strategy Clarity Sessions (120 minutes) Perfect when you're seeing signs of untapped potential but need clarity on next steps. We'll identify your key growth opportunities and create an action plan to unlock them.?

One-to-One Business Coaching For founders ready to transform limiting patterns into breakthrough success. Ongoing strategic guidance to build robust systems while scaling your impact.?

Strategy Days When your business is at a critical growth point. We'll deep dive into your operations, identify hidden potential, and create a comprehensive roadmap for sustainable scaling.?

Ready to unlock your business's full potential? Book a consultation call?to explore the right option for your growth stage.?