Why female founders shouldn’t fear a post-COVID-19 economy
Britain’s female entrepreneurs are less likely than men to ask for business funding to scale up operations, leaving a gap at the heart of the UK economy. This cannot continue if the British economy is to ‘build back better’ after COVID-19, says a panel of experts brought together by Barclays
Even before the pandemic, female entrepreneurs faced structural barriers when it came to accessing funding. They must be encouraged to scale their businesses to help the UK economy bounce back, according to a panel of experts hosted by Female Founders Forum Coordinator Jess Etherington.
The panel, made up of Barclays’ Juliet Rogan, Liberal Democrat peer Baroness Kramer and female funding experts Julia Elliott Brown and Alexandra Daly – agreed that more access to funding for female entrepreneurs could help Britain to ‘build back better’ after COVID-19.
Who’s at the table?
Juliet Rogan, Head of High Growth and Entrepreneurs Coverage at Barclays, said there was a huge gap in the UK economy created by a lack of female-led businesses, which often fell foul of a lack of diversity among funders.
“Create an environment where women start and scale businesses at the same rate as men and we could add nearly £250bn to the UK economy – this should be a key part of the post-COVID recovery,” she explained.
Barclays is a founding signatory to HM Treasury’s Investing In Women Code, set up in 2019 to advance female entrepreneurs. Rogan displayed her passion about the code, sharing data from two Barclays reports on female entrepreneurship, Untapped Unicorns in 2017 and the Here & Now report in October last year.
Both reports found that access to finance is one of the main barriers to women entrepreneurs, and although the Here & Now report shows progress, Rogan said the gap remained, partly due to a lack of diversity among investors.
She said that when attending Venture Capital events, the most common question asked was always, ‘How do I get a meeting with a potential investor?’.
“They would always say, ‘Through my network’,” she recalled. “It always struck me that all of the people looked the same and had the same background. There was very little diversity, so how could people get into that network?”
Julia Elliott Brown, CEO and Founder of Enter the Arena, which advises women entrepreneurs on fundraising and growth, took up the tale, explaining why few women ask for the money they need to make their businesses bigger.
Create an environment where women start and scale businesses at the same rate as men and we could add nearly £250bn to the UK economy – this should be a key part of the post-COVID recovery
Head of High Growth and Entrepreneurs Coverage at Barclays
“Most women don’t even realise they can scale their businesses. Nobody has opened their eyes to the possibility that they could make it into something much bigger and have more impact in the world,” she said.
She added that women are fantastic at setting up businesses that solve the problems that they see, but because they often end up presenting their ideas to panels of men when searching for funding, the men don’t always understand the problem they are trying to solve – and the money doesn’t flow.
She cited her own experience of setting up the custom-designed shoe business Upper Street, in 2010, as an example of this.
“Male investors would say, ‘Is there really a business in that?’ and I would say, ‘Look in your wife’s wardrobe’.”
The cost of COVID
Fellow panel member Liberal Democrat peer Baroness Kramer, who worked in finance before her political career, said she felt COVID-19 had made the landscape for female founders even more challenging.
Rogan, at Barclays, praised the “resilience and tenacity” of the female entrepreneurs she’d encountered who had ‘pivoted’ during the pandemic, including a businesswoman who had driven children’s car seats around to her customers in a van, following a breakdown in her logistics chain.
Closing the gap
Removing the gap between funding for male and female businesses is vital for the economy, panel members emphasised, pointing to the resources available for women who want to found and scale businesses.
These include digital resources from the Female Founders Forum, a partnership between Barclays and The Entrepreneurs Network, as well as mentoring services available through Barclays’ Eagle Labs co-working spaces.
Barclays also recently launched a funding readiness programme with Capital Enterprise to help startups get their business plans ready for funding, while panellists mentioned The Prince’s Trust as another helpful resource.
All participants agreed on the importance of mentoring to help female-led businesses get what they need in terms of funding.
Alexandra Daly, CEO and Founder of AA Advisors and a member of the Female Founders Forum, said she had “never seen such a hard time” for entrepreneurs, but that women were rising to the challenge.
“The companies of tomorrow are made today,” she said. She encouraged listeners to stand strong and look for funding when needed, since female-led businesses have an excellent track record and are more likely to be approved when they borrow.
“Make no mistake, COVID-19 has been horrendous for the economy and I don’t think we’ve seen the half of it,” she said.
“But women are fantastic business leaders and they will be the lifeblood of the economy. Remember that it’s in times like this that future businesses are made. Keep solid and keep the faith.”