Investing in Women : Acceleration, or stagnation?

I've been reflecting after attending events this week, some focussing on female entrepreneurship and others not, about the scale of some of the problems we - as well meaning individuals or indeed as part of collectives like Fund Her North - are trying to tackle in the industry. And I've got a lot of mixed feelings.

Started in 2020 during the pandemic by Helen Oldham and 28 other women (including myself) working at board or senior level within funding organisations across the funding landscape, Fund Her North is close to celebrating its 2nd Birthday in October.

Founded to address the stark imbalance of investment into female founded businesses and closely aligned to the Alison Rose Review, Fund Her North aims to drive more investment into female founded businesses from a baseline of 1% of VC capital in solo-female founded businesses, that hasn’t really improved significantly since this data was published in 2019, through offering support, signposting, supporting through the process and of course, by direct investment into their businesses.

Accelerating Funding for Women in Business

On a panel at the Accelerating Funding for Women in Business event, held at Circle Square in Manchester recently, I spoke about the need to build your network as a female founder. Men tend to have much more developed professional networks than women do (or else do not lack for confidence in approaching people they know professionally and personally as Rachel McDonald, MD at Fearless Adventures suggested).

Building contacts through getting out there at face to face meetings and events is a good starter for beginning conversations around investment, and asking if someone is able to support you at the next stage of your journey. After all, warm introductions make up only 39% of VC deal flow but end up representing 82% of what gets funded ultimately (British Business Bank Female VC report). Logic dictates if we can make more warm introductions for female founders, this could help to shift the needle.

Data has shown that women are 2x more likely to back other women, which is a strong case for more women angel investing and a positive and uplifting story given the data coming out of Fund Her North's Women Angel Syndicate, achieving its 11th deal since the syndicate formed in 2021 as Jordan Dague shared with us earlier in the event's running order.

But sadly this doesn't mean female founder struggles are over when it comes to raising follow on funding.

Now for the Horrible Irony...

In fact, Women are more likely to struggle to raise follow on investment if they received funding from female VC. A recent Forbes article stated that "When Women receive support from other women, observers may implicitly believe that the relationship was motivated by considerations other than merit, which leads to a discount in perceptions of competence."

I don’t need to point out this is rather rich, and it seems we are damned if we do, damned if we don’t. This is in addition to the gut-punch that the percentage of capital that has gone to female founded companies has barely moved (1% 2019, and bobbing around 2% in all subsequent years) in spite of the best efforts of rising female VCs and women angels across the UK.

I shared this with event attendees feeling rather angry, even though I read the article earlier in the week. It seemed that there was recognition of this in the audience members faces and vocalisations. It was all too familiar.?There are weeks that can go by where you are insulated from this blistering reality, and others where the stark horrifying data really hits you in the face and knocks you off balance.

These disheartening statistics, and the lack of improvement we are seeing in the % of funding that go to female founded enterprises, rather than looking at the 'n' figure, only illustrate that Fund Her North is needed now more than ever.

We are built as a network to cover all stages of a business's funding lifecycle, from pre-seed to Series A+, covering grants, debt and equity. We can introduce deals directly into one another's funds, using the warm introduction power in our favour.

But I remain uplifted by the many conversations I have with wonderful entrepreneurs whose light and energy never seems to dim, and I take energy and joy in seeing their businesses flourish - all the better for having female capital within it.

None of this bad news changes my mind that what needs to be done is still the right thing. It only strengthens my determination, and the determination of all my FHN colleagues (entrepreneurs too no doubt), to succeed and keep pushing the agenda forward - and keeping the spotlight firmly on outcomes.

We're watching.