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Ideas & Observations

Guest contributor: Sophie Milliken, founder of Moja

Moving the dial on female funding

As recent findings from The Alan Turing Institute show female-founded companies account for less than three per cent of venture capital deals involving artificial intelligence start-ups, Sophie Milliken, founder and chief executive of Newcastle-based PR agency Moja Group, calls for watershed revision.

The findings of the Turing report were sadly not a surprise, for they reflect the wider challenges around funding I hear throughout the UK from fellow female founders.

As well as having lived experience as a female founder, I am in my second year of a PhD at Durham University focusing on female entrepreneurship.

When writing my initial research proposal, I read widely to understand the challenges faced by women entering entrepreneurship, and found funding was a key barrier.

I was shocked to discover how hard it was for women to secure funding, and appalled at the low numbers obtaining investment.

Many of us are now aware of the often- quoted stat that for every £1 of venture capital investment in the UK, all-female founder teams get less than one pence.

In contrast, all-male founder teams get 89 pence and mixed-gender teams ten pence (1).

Despite such increased awareness, though, the funding between male and female entrepreneurs remains stark.

One of the best resources for female founders is the Alison Rose Review of Female Entrepreneurship, which was created in 2019 with annual updates since.

It was commissioned by the Government with the aim of identifying and addressing the challenges faced by female entrepreneurs.

Highlighting many of the barriers particular to female entrepreneurship, including a lack of visible role models, caring responsibilities and access to funding, it outlined a series of recommendations, such as measures to increase access to finance, provide greater mentoring and networking, and promote financial education for women.

One of its brilliant initiatives is the Investing in Women Code, which is designed to directly address the lack of investment going to female entrepreneurs from early stage and seed funding through to venture capital investment and bank loans.

However, one of its aims is that the level of funding should match the proportion of women-led companies in the economy, which was 20 per cent in 2022.

So we still have a long way to go!

And what doesn’t help is that venture capitalists are predominantly male, with research showing they tend to ask men promotion questions and women prevention ones.

There are several research reports and articles that show this to be key in holding women back; the findings of a Harvard Business Review article (2), for example, are particularly shocking.

So, what would actually help?

I would love to see more visible role models and case studies, which would make securing investment seem more accessible to women starting out. More women-led investment events, groups and accelerators would be positive too.

And I’d also love to see more women on investment boards and as angel investors.

These are actions that could make real change to that one pence.

1: British Business Bank;
2: Harvard Business Review – How the VC pitch process is failing female entrepreneurs;