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Home » Diversity and Inclusion » Female entrepreneurs are undervalued compared with male peers

Ava Scott

Research and Consultancy Associate, BEAUHURST

Data collection and analysis are critical tools in uncovering patterns that may be difficult to observe in day-to-day life.

Biases and prejudices against female entrepreneurs may be less overt than in years gone by – some female founders we interviewed attested they had never felt its effects – yet the data tells a different story. 

For our latest report, we’ve partnered with Newable to explore gender diversity in entrepreneurship across the high-growth ecosystem. Our deep dive into the data illustrates the profound systemic inequality that can be found across the UK’s entrepreneurial space. While our report uses many examples to evidence this, the gender gap observed in equity investment paints a particularly shocking, though tentatively encouraging, picture. 

Deals with a female founder are growing

Over the past eight years, the number of deals secured by companies with a female founder has grown massively, increasing 777% between 2011 and 2017. This is a much more accelerated rate of growth than the number of deals secured by companies with all-male founders, which only increased by 462% in the same period. Angel network Newable and other investors note that they have received increasing numbers of applications for funding from female-founded companies in recent years. 

While female founders are clearly securing a lot more investment year on year (18-fold between 2011 and 2018), this is largely driven by the stratospheric growth seen across all investment. By proportion, companies with at least one female founder secure a dismal and stagnating percentage of the amount invested: just 9% in 2019, though representing 25% of all high-growth companies. Companies with all-female founding teams are even more underfunded, securing just 1.5% of pounds invested – the lowest share since our records began – though representing 14% of all high-growth companies.

There are many reasons for this, including a market preference for larger deals with later-stage companies (where female founders are particularly underrepresented), as well as other prejudices found across STEM sectors, grant awards and in attitudes towards female entrepreneurs. The data in our report demonstrates that, ultimately, a lot more needs to be done across all these areas before female entrepreneurs emerge on equal footing with their male counterparts.

Beauhurst provides research and insight on the UK’s high-growth companies and the supporting business ecosystem. Established in 2011, we have collected unrivalled data on over 30,000 ambitious companies, all the investments and grants they have received, and data on every competitive startup accelerator programme.

Read the report here:

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