Highlights from our policy forum on female entrepreneurship

On 19 April 2021, BGF was proud to host a virtual policy forum to discuss the opportunities and challenges faced by female entrepreneurs in the UK today. The hour-long session is available to view online. Below are some of the crucial learnings that emerged from the discussion, which featured:

• Kemi Badenoch MP, Exchequer Secretary to the Treasury and Minister for Equalities
• Alison Rose, CEO of NatWest
• Rita Clifton CBE, portfolio chairman and non-executive director, author and adviser
• Alice Avis MBE, non-executive director of BGF, Edrington Group, Cyden and ESP plc
• Dr Eliza Filby, writer, speaker and researcher specialising in generational intelligence

To be an entrepreneur is extraordinary. To be a female entrepreneur is more extraordinary still.

These words from Kemi Badenoch MP speak to the determination and energy required of anyone embarking on the exciting journey of starting their own business. For women, being an entrepreneur can seem an especially daunting prospect. The vast majority of venture capital funding in the UK goes to companies founded by men. Why aren’t women better represented? While the panellists agreed there are no easy answers, they all felt more could be done to give women access to the networks and knowledge that can help them succeed.

We can’t afford to let Covid disruption and uncertainty set us back

The Covid-19 pandemic represents a serious challenge to female entrepreneurship, with anecdotal evidence suggesting women have been forced to prioritise their families over their businesses in the past year – a choice men are typically less likely to have to face. There are some encouraging signs. The prevalence of remote working has made it easier for women to launch and run businesses from home, while initiatives such as the Bounce Back Loan Scheme (BBLS) have raised awareness of where to get business funding. “We’re seeing exceptionally high demand for funding from women-led businesses,” said Alison Rose, CEO of NatWest.

Unlocking female entrepreneurs’ potential could add £250 billion to the economy

The Rose Review suggested that if women in the UK were to set up and scale businesses at the same rate as men, they would contribute an additional £250 billion to the UK economy. Unlocking female ingenuity could benefit everyone, not least because female entrepreneurs are likely to apply their energies to sectors of the economy that men have tended to overlook. The Rose Review also quoted data showing that only 5.6% of UK women run their own business, compared with 15% of women in Canada, suggesting that cultural factors play a role in determining female entrepreneurship levels.

It’s time to change the notion that business investment is aggressive and macho

Rita Clifton, portfolio chairman and non-executive director, suggested programmes such as Dragon’s Den have created a misleading impression that applying for business funding means being exposed to a hostile, even inhumane environment. That’s usually not the case in real life, she said, yet the perception may deter talented women from applying for business funding, especially given there is some evidence women are more likely to suffer “imposter syndrome” than men. Supportive networks are crucial in providing an antidote to the idea that the investment process has to be aggressive and macho.

Financial education is important if you want to speak the language of the boardroom

Applying for business funding is a rigorous process, though, and to navigate it successfully, entrepreneurs need to be able to speak “the language of the boardroom”, which is finance. Unfortunately, this language often consists of a medley of acronyms and abbreviations, which may be confusing to those who do not have a background in mathematics or accountancy, subjects in which women are underrepresented at UK universities. Alice Avis, a non-executive director at companies including BGF, recalled that when she was in talks to obtain private equity funding, a female colleague helped her to demystify the jargon, after which she realised the underlying concepts were not so complicated after all. She went on to lead a successful business, The Sanctuary Spa.

It’s crucial that more women become investors, as well as business owners

The panellists agreed that female entrepreneurship would get a boost if there were more women involved in deciding who gets business funding. Greater female representation could counter the problem of unconscious bias, which can manifest itself in investment teams only backing ideas they know and understand. Is an all-male panel of investors the right group of people to assess a business in the bridalwear sector, for example? The panellists agreed that funds with a specific mandate to support female-led businesses are crucial. These include The UK Enterprise Fund, a partnership between BGF and Coutts.

The “side hustle” generation is normalising entrepreneurship for young women

Dr Eliza Filby discussed how Generation Z has been called the “side hustle” generation. Having grown up with smartphones, they are acutely aware of the power of social media as a tool for launching companies. The pandemic may have accelerated social media entrepreneurship, with millions of young people on furlough or unemployed, with plenty of time at home to plan and launch digital businesses. The explosion of e-commerce during lockdowns has only contributed to this trend.

Ultimately, it’s about having the confidence of knowing what you’re worth

The panellists agreed the most important thing is for female entrepreneurs to go for it. There are challenges, of course. Research has shown there is a “confidence gap” in the workplace, with women more likely to perceive themselves as underqualified compared with male colleagues, even when there is no difference in performance. Mentoring, networks and information-sharing can make the difference by helping female entrepreneurs find role models, receive the advice they need, and gain support in making successful applications for funding.

Where BGF comes in

BGF is proud to have been named the most active investor in female-led scale-ups by the ScaleUp Institute. The proportion of women on BGF’s investment team has risen to a current level of 27%. This session was the first of a series of virtual policy forums exploring topics of interest to entrepreneurs, business owners and investors. We look forward to hosting more debates and sharing further insights in future.