It Started With a Simple Question

Welcome to the Funding Focus newsletter where we share the latest in the Fight for Fairer funding in investment. This newsletter from Funding Focus founder, David B. Horne, is part of the platform that sheds light on the uneven playing field that female and under-represented entrepreneurs of all genders face when it comes to raising capital for their businesses. We hope you enjoy it!?

Read our latest edition below.?

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If you’ve been following my journey with Funding Focus and the fight for fairer funding, you’ll know that I’ve been working on my 2nd book. Funded Female Founders, which was born from #thefightforfairerfunding, is about a month away from being published!?

Over the next few weeks we’ll be sharing some snippets and more from the book.

Watch out for the publication of Funded Female Founders – How to traverse the uneven playing field and secure funding to grow your business. It’s due out late June/early July.

In the mean time, here’s a sneak peak from the introduction to the book:?

It started with a simple question. I’m ashamed to admit this, but when I was asked the question, not only did I not know the answer, I did not even know about the issue it raised.

It was the spring of 2019 and I had been on stage, speaking about raising venture capital (VC) for small- and medium-sized enterprises (SMEs). Venture capitalists are professional investors who buy shares in companies in return for cash so those companies can grow. After my talk, a woman came over and asked me the question.

‘Why does so little VC funding go to female entrepreneurs?’

‘I have no idea,’ I replied. ‘But I’ll find out.’ The question came from a woman, let's call her ‘Elizabeth’ (not her real name) and I am grateful to her for opening my eyes. Once you truly see something, it cannot be unseen.

A week after appearing on that stage, I was in a meeting with the chief executive of the British Business Bank. She and I had met a few weeks previously at a networking event. We had a pleasant conversation and towards the end, I decided to ask if she knew about the lack of VC funding going to female entrepreneurs.

With a wry smile, she reached into a drawer in her desk and pulled out ‘UK VC & Female Founders’, a full-scale research report which the UK government commissioned the bank to prepare. Researchers looked at all the VC deals funded in the UK in 2017 and what they found was pretty stark.

Out of all the money invested by VC firms in that year, the amount going to all-female founding teams was less than 1%. These teams submitted 5% of pitch decks, but got less than 1% of total funding. That’s a 1 in 5 success rate. Just 10% of funding went to mixed-gender teams, who had submitted 20% of pitch decks. A little better, but it’s still only a 1 in 2 success rate. All-male teams received more than 89% of total funding, even though they only submitted 75% of pitch decks. That’s 1.2 to 1.

Something is wrong here.

Not long after that meeting, I was talking to a friend who works at the London Stock Exchange, an organisation which has been leading the charge to get more women on to the boards of companies listed in the UK. She and I were discussing the ‘UK VC & Female Founders’ report when inspiration hit me. I felt compelled to put on an event to raise awareness about this issue – not an event that moans about how wrong or unfair it all is, but one showcasing female founders who have traversed the uneven playing field and succeeded in raising funding to grow their businesses.

A week before the event, Morningstar published an article which found of the almost 1,500 listed open-ended investment funds in the UK, 108 of them are run by men named David. As I’m named David, this sounded kind of cool; but wait. The same article tells us only 105 funds are run by women. More funds are run by a man called David than by all women? Something is wrong here too.

As Morningstar concluded:

‘It’s a stark reminder of the lack of diversity across the fund industry, which is often accused of being “pale, male and stale”.’

On 25 November 2019, it was a full house in the theatre at the London Stock Exchange; full of entrepreneurs, investors, advisors, students and others who had come to hear the stories of women successfully raising equity funding. Two things became strikingly clear to me from this event.

First, this isn’t just a UK problem. In social media posts my team and I did for the event, we received comments from people living in countries around the world – Australia, Belgium, Canada, China, France, Germany, Ireland, South Africa, Switzerland and the USA – all saying it is a big issue for them too. Second, nobody seemed to be looking at this issue from the perspective of the entrepreneur. The investment industry had put on events focused on investors, but nobody was focusing on the founders – the people who are actually facing the challenge.

This is a global issue that affects all of us. The playing field is not level. Most money is managed by men called David and the vast majority of it goes to men like him. ‘Pick a David, any David’ should not be the criterion on which funding is allocated.

After the success of our first event, my team and I planned to run a series of events in 2020, but a virus had other ideas and our plans were scuppered. Later in that year, we decided to run another big event, this one online, on the anniversary of the first one: 25 November. This time, we reached a global audience, stretching as far west as San Francisco, USA; as far east as Cebu, Philippines; and as far south as Cape Town, South Africa.

In 2021, we held three smaller events and the third Annual Conference in November. In March 2022, we were back at the London Stock Exchange, filling the theatre once again and streaming live to a global audience. From the events we’ve held so far, with little spent on marketing, we have attracted attendees from fifty-four countries on six continents. I don’t think there are many entrepreneurs in Antarctica. If you know one, please share this book with them.

You may be wondering where my interest in gender equality comes from. It goes back fifty years before I met Elizabeth. In 1969, when I was seven years old, I told my mum I really loved chocolate chip cookies and wanted more. Her response?

‘Let me teach you how to bake chocolate chip cookies.’ Baking quickly developed into cooking, and by the time I was twelve, I was making dinner for the whole family at least once a week.

At the age of fifteen, when I met my first girlfriend, I told my mum I thought I looked much smarter wearing shirts that had been ironed.

‘Simple,’ she said. ‘I’ll teach you how to iron shirts.’ In an age when baking, cooking and ironing were considered ‘women’s jobs’, I am truly grateful my mum did not subscribe to such constraints. Learning about gender equality as a child was powerful and I’m grateful to my mum (who is ninety-three years old as I write this) for teaching this in a way that was gentle, clear and unequivocal.

My wife and I met when we were seventeen and have been together more than forty years; our daughters are twenty-nine and thirty-one. Gender equality has been the norm for me throughout my adult life, just as my mum taught me gently, clearly, unequivocally.

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Watch out for more in our next newsletter. Until then…

With love and gratitude,

David