Written evidence submitted by The Council for Investing in Female Entrepreneurs

The Council for Investing in Female Entrepreneurs (CIFE) welcomes the opportunity to respond to the Treasury Select Committee inquiry into the venture capital market.

Endorsed by HM Treasury and the Department for Business, Energy & Industrial Strategy, the CIFE brings together leading investment firms and institutions to identify the best ways to tackle barriers faced by female entrepreneurs.

It was set up by AA Advisors’ Alexandra Daly and Coutts’ Mohammad Syed in response to the Alison Rose Review of Female Entrepreneurship, which demonstrated that up to £250 billion of new value (equivalent to 1 SME million businesses) could be added to the UK economy if women started and scaled new businesses at the same rate as UK men.[1] CIFE founders were astonished by the tidal wave of support from across the financial services community on launch, from those that wanted to be involved and effect change.

Executive summary

While progress has been made towards realising the economic potential of female entrepreneurs, there is still more work to be done if we are to reach the government’s goal of boosting the number of female founders by 600,000 by 2030.

Access to awareness to funding is a key barrier to this goal and the venture capital industry plays a crucial role here.

Despite the recognised economic benefits female founders could bring, one recent data source estimated that under 5 per cent of total venture capital investment goes to all-female teams.[2][3] The current situation represents a threat to the availability of domestic capital to allow women-led innovative enterprises to scale and thrive in the UK. Equally, there is an opportunity to improve the availability of this capital by removing barriers to funding and increasing its supply to female founders.

Action and collaboration between government and the VC industry is needed to ensure the untapped potential of female entrepreneurs is realised.

Key recommendations:

Taking account of the context above and the challenges and opportunities set out, we recommend:

Government should work alongside the British Business Bank, UK Business Angels Association (UKBAA), and British Private Equity and Venture Capital Association (BVCA) to make renewed efforts to urge the venture capital industry to:

  1. Take action to make itself more accessible to female founders, promoting and drawing on the recommendations in the 2021 publication: Guidance and Best Practice – Examples for VCs and Institutional Investors.[4]
  2. Fund a significantly greater proportion of female-led businesses.
  3. Improve the gender balance among its teams, particularly those sitting on investment committees.
  4. Increase the number of venture capital signatories to the Investing in Women Code (IiWC) run by the Department for Business, Energy and Industrial Strategy, a commitment by financial services firms to improving female entrepreneurs’ access to tools, resources and finance established following the Rose Review – A recruitment campaign by the BVCA and British Business Bank is currently targeting majority coverage of the VC industry.


  1. The current state of the venture capital industry in the UK – a lack of funding for female founders:

Leaders within the venture capital industry are pressing hard to ensure greater funding for female entrepreneurs, and there has been a sharp uptick in the number of venture capital signatories to the IiWC. However, the current indicators show an unequitable distribution of funding that threatens to stand in the way of female founders attempting to scale up their businesses.


  1. Enabling change within individual firms:

As an industry, venture capital needs to do more to nurture a diverse community of entrepreneurs. Many VCs feel poorly equipped to tackle diversity and inclusion (D&I) issues. This is for a variety of reasons, such as a poor understanding of the resources available to help fix the problem, in some cases a lack of data and tooling, and in many cases a hyper-sensitivity to the consequences of doing or saying the wrong thing. Too often, the result is doing nothing.

However, these problems can be swiftly addressed and there is good work already taking place across the industry.

On joining the board of the Rose Review the co-CEO of Octopus Ventures, Emma Davies, noted that 23 per cent of the businesses her firm had backed since 2016 were led by female founders, a significant improvement on the industry average (17 per cent of businesses in the UK are women led).[7]

Another venture capital firm, Atomico, has launched a number of initiatives to address the issue, with positive results, including:

Measures to enable change inside venture capital firms can include:


  1. Industry wide interventions to address this issue

There have been a number of significant interventions to address this issue across the industry:

The Rose Review

In 2018, Alison Rose was commissioned by HM Treasury to lead an independent review of female entrepreneurship. The Rose Review was launched in 2019 and shed renewed light on the barriers faced by women starting and growing businesses, including awareness of and access to funding and identified ways of unlocking this untapped talent. In its fourth year, the Rose Review is driving forward a series of workstreams across the banking and investment landscape to break down this obstacle. This includes the publication of annual reports to assess progress made, and regular meetings of a board of senior figures to discuss how to drive forward this work and to get more investment to women.

Given the current landscape of the venture capital industry, the most recent Progress Report[8] delivered a detailed update on the state of this funding sector and outlined a series of commitments for the year ahead. The recent appointment to the Board of Emma Davies with a direct focus on venture capital is just one of the ways the Rose Review intends to drive forward its work in this area.

The Investing in Women Code (IiWC)

Following the initial publication of the Rose Review in 2019, the IiWC was launched to increase transparency on funding decisions, investment into female founders, and showcase the actions taken to create long term and meaningful change. Made up of organisations across the investment industry, notable signatories from the venture capital community include Ada Ventures, Anthemis, Astia, Atomico, Business Growth Fund, Octopus Ventures and Playfair Capital.[9] The recent Rose Review Progress Report[10] noted the number of venture capital signatories to the Code had risen from 50 to 90 in a year.

Signatories have shared the impact of singing up to the Code[11]:

In recognition of the need for more action, The Rose Review, British Business Bank, UKBAA and BVCA are launching a fresh recruitment drive for the Code across the venture capital landscape, calling on all firms who are not signed up to encourage their participation,[12] aiming to attract signatories covering the majority of the industry.

For existing members, there will be a reinvigorated set of discussions around the barriers the venture capital industry faces in making meaningful chance, and further promotion of the 2021 Guidance and Best Practice Examples for VCs, Private Equity and Institutional Investors.[13]

The British Business Bank

Alongside collaboration with other industry bodies, the British Business Bank published a study highlighting the current venture capital climate for female founded businesses in the UK. The VC Female Founders’ Report revealed the lack of venture capital funding going to women and the reasons why this is the case. It also proposed a series of steps for venture capital firms including: a call on firms to improve founder diversity and inclusion; to collect and analyse D&I data on founders and share these findings; to connect with peers across the industry to help drive the agenda forward; and to develop steps to improve diversity internally at firms.[14]

The Bank’s commercial subsidiary, British Patient Capital (BPC), manages a £2.5 billion patient capital investment programme. Diversity and inclusion is a key priority for BPC and is included in BPC’s overall assessment of applicants and their teams. BPC has adopted the Institutional Limited Partners Association’s (ILPA) diversity guidelines in its processes to measure and report the gender and ethnic diversity of fund managers.

Diversity VC

Diversity VC launched an industry standard which assesses policy across four areas of a fund: Recruitment and HR; Internal Policy and Culture; Deal flow Sources; Portfolio Support. Authors of the Guidance and Best Practice - Examples for VCs, Private Equity and Institutional Investors’ Report have urged all investors to become certified under this.

Guidance and Best Practice - Examples for VCs, Private Equity and Institutional Investors

Leading investors and professionals within the venture community have created a live working document[15] as a resource for institutional and other investors who wish to maximise access to diverse deal flow.

The document lays out a checklist of best practice processes for venture capital, private equity and institutional investors to follow to ensure more funding reaches diverse businesses. These are split into four sections: talent acquisition, retention and development; internal education, culture and policy; investment bias; portfolio guidance and management.

UKBAA’s Good Practice Guide to Angel Investment in Diversity

This document[16] brings together good practice from across the angel and early-stage community and sets out a three-point plan for Angel Investor groups and individual investors to increase their actions to back early-stage women and founders, including detailed practical steps to improve investment processes, establishing a strategic commitment and increasing diversity in the investment base.

The UK Enterprise Fund (UKEF)

A joint initiative between Coutts and BGF to fund and support entrepreneurs, aiming to give women better access to capital, help prepare for investment, and provide networking opportunities. The UKEF aims to increase the number of fast-growing firms run by women that are backed by BGF and benefit from access to capital.

  1. Conclusion

Progress has been made towards realising the £250 billion of value that could be unlocked if women started and scaled businesses at the same rate as men, but there is still much work to be done if we are to reach the government’s goals of boosting the number of female entrepreneurs by 600,000 by the end of the decade.[17]

The government will not realise its ambition without the active help and engagement of the venture capital industry. The IiWC now has a total of 153 organisations signed up, with a combined investment power of nearly £1 trillion,[18] including over 100 venture capital firms.  Ministers can work with venture capital to ensure that female founders are receiving the funding they deserve.

Through fresh thinking and swift action, with collaboration between government and the industry, we can unleash the untapped potential of female-led businesses to drive the UK’s economic recovery.

June 2022



[1] ‘The Alison Rose Review of Female Entrepreneurship’, HM Treasury, 8 March 2019, (Link)

[2] The Annual Small Business Equity Tracker reported that around 2% and 5% of total VC investment was received by all-female teams in 2019 and 2020, out of record high levels of £8.5 billion and £8.8 billion, respectively, of total annual venture capital. Further British Business Bank analysis of Beauhurst data suggests these percentages amount to £0.17 billion and £0.4 billion


[4] ‘Guidance and Best Practice Examples for VCs, Private Equity and Institutional Investors’, Various, February 2021, (Link)

[5] ‘The Rose Review Progress Report 2022’, The Rose Review, 28 February 2022, (Link)

[6] ‘2021 Investing in Women Code Report’, The Investing in Women Code, 2021, (Link)

[7] Emma Davies, City AM, 24 May 2022, (Link)

[8] Ibid.

[9] ‘Investing in Women Code: List of signatories’, HM Treasury, February 2021, (Link)

[10] The Rose Review, 28 February 2022, (Link)

[11] ‘2021 Investing in Women Code Report’, The Investing in Women Code, 2021, (Link)

[12] Ibid.

[13] Ibid.

[14] UK VC and Female Founders report’, The British Business Bank, 2019, (Link)

[15] Various, February 2021, (Link)

[16] UKBAA Good practice guidelines for Angel Investment in Diversity December 2021

[17] The Rose Review, 28 February 2022, (Link)

[18] Ibid.