1. Addressing Structural Barriers in Public & Private Funding 8
2. Expanding Access to Investment & Business Networks 9
3. Expanding the Number of Female Investors to Shift Investment Bias 9
4. Leveraging Sponsors to Open Doors for Female Entrepreneurs 10
5. Recognising the Caregiving Burden as a Business Barrier 11
6. Promotion of Diverse Female Founder Role Models 11
1. International Models for Female Entrepreneurship Support 12
2. Addressing Bias in Funding & Investment 13
3. Building Stronger Female Investment Networks 13
4. Making Business Funding & Procurement More Inclusive 13
1. Define Innovation in a Gender- and Intersectionality Inclusive Manner 14
2. Increase Female Representation in Investment Decision-Making 15
3. Implement Gender-Specific Investment Targets 15
Introduce Longitudinal Funding Support for Female-Led Businesses 16
4. Scaling Female-Led Businesses Through Public-Private Investment 16
5. Reform Assessment and Application Processes 16
6. Expand Procurement and Supply Chain Access 17
7. Introduce Financial & Tax Incentives 17
1. Existing Data on Female Entrepreneurship 18
2. Data Required to Track Success & Progress 18
Let’s Fund More Women (LFMW) represents a coalition of 92 UK-based female founder networks committed to improving access to funding for women in the UK.
LFMW was originally founded to improve female entrepreneurs' access to Innovate UK (IUK) grant funding after IUK announced only 25 Women in Innovation grant winners in September 2024, despite initially indicating 50 awards.
In response, LFMW united 650+ female founders across sectors, leading to parliamentary scrutiny and IUK reversing its decision, awarding all 50 grants as originally promised.
This initial success led us to establish a Community Data Trust, which includes allies such as academics, to investigate more closely the experiences of our community when applying for IUK funding.
Women founders applying for Innovate UK grants are building high-growth, innovative businesses that contribute to the Government’s inclusive growth objectives.
Following the reinstatement of the 25 WII grants, LFMW has collaborated with IUK to improve grant processes using survey data and community feedback.
This response has been contributed to by LFMW members:
● Dr Lorna Treanor FRSA https://www.linkedin.com/in/dr-lorna-treanor-frsa-b962367/
● Angela Prentner-Smith FRSA https://www.linkedin.com/in/angela-prentner-smith/
● Luna Muñoz PhD FRSA FHEA https://www.linkedin.com/in/luna-clara-munoz/
● Katherine Church https://www.linkedin.com/in/katherinechurch/
● Dr Amber Ghaddar PhD https://www.linkedin.com/in/amberghaddar/
● Jen Nucifora https://www.linkedin.com/in/jen-n-660ba9b/
● Dr Kũi Makay https://www.linkedin.com/in/dr-k%C5%A9i-m-018bb912/
● Led by Bridget Greenwood https://www.linkedin.com/in/bridgetgreenwood/
Focus and Contribution of this Submission
This submission focuses upon the build and early scaling stages of female founders’ journeys.
We would welcome the opportunity to engage further with the Inquiry and are happy to provide further information or speak to our submission if required.
All data sources are cited under References.
When referring to women or female entrepreneurs, we explicitly include all intersecting identities, recognising the unique challenges faced by ethnic minority, disabled, neurodivergent and LGBTQ+ women, and also women from diverse socioeconomic backgrounds and geographical regions.
While this submission is directed to the UK Parliament (England and Wales), we acknowledge that Scotland has taken a more structured approach, recently commissioning Women’s Enterprise Scotland to produce a research report on female entrepreneurship. This demonstrates that long-term government engagement is critical to progress (In 2023, women in Scotland started and ran new businesses at nearly the same rate as men for the first time).
However, if female entrepreneurship remains purely a devolved issue, there is a risk that it will not be consistently prioritised across all regions. A national framework with regional oversight, ensuring consistent funding, policy focus, and data collection across all UK nations, may be the most effective approach.
As such, we have included Scottish statistics that highlight where long-term government engagement has had a positive impact, while also demonstrating that systemic challenges, particularly in funding and investment, persist, reinforcing the need for further action.
Women entrepreneurs face systemic and structural barriers that limit their ability to start and scale businesses. These barriers exist across funding, assessment processes, investment networks, and financial policies.
Access to finance is the primary barrier. Women-led businesses receive disproportionately low levels of funding. In Scotland, only 1.8% of total investment goes to female-led businesses, despite women starting businesses at an equal rate to men, and Scotland receiving the second largest inward investment amount in the UK consistently (outside of London) . Across the UK, only 1% of private investment is directed toward women-led ventures, while they represent circa 20% of all founders.
Public funding structures reinforce existing inequalities. Many public grant schemes, including Innovate UK’s, require matched private investment. Because women already struggle to secure private capital, this requirement effectively excludes them from public funding opportunities. Specifically in Scotland Scottish Enterprise is one of the largest (if not the largest) investors, yet they systematically reinforce the bias in the investment market, by insisting on match funding only for investments and grants.
Debt financing requirements disproportionately impact women. Business loans above £25,000 are unregulated, allowing lenders to demand personal guarantees such as homes or personal assets. Given that women own fewer high-value assets than men, this requirement disproportionately restricts their ability to secure business loans. This also means women have far more personal risk to take in securing funding through loans, as they have to guarantee the debt, as opposed to lower personal risk in grants and equity investment. Entrepreneurship already requires risk-taking, but structural barriers force women to take even greater personal risks. Limited access to lower-risk funding options like equity and grants pushes women into more precarious financial positions. Combined with the gender wealth gap, this further deepens funding inequalities..
Crowdfunding for equity typically also requires the company to have secured an equal amount of equity investment before being accepted onto mainstream crowdfunding platforms - providing yet another barrier to women to access business funding.
Assessment and funding decision biases create further obstacles. Women founders experience greater scrutiny during funding assessments. Research shows that investors and assessors ask women risk-based questions, while men are asked about growth potential, often discounting women’s achievements. Additionally, male assessors—and those unfamiliar with specific cultural markets—often struggle to understand the demand and market potential for female-focused and culturally specific products and services, further disadvantaging women founders.
This bias in pitch questions type explains why female founders receive five times less funding than their male counterparts. Ethnic minority women face compounded barriers, with black female founders receiving as little as 0.2% of funding, despite a 4.37% increase in ethnic minority female-led businesses in the last 12 months (reported by Prowess). Many women are even making their pitch decks more masculine and finding male co-founders to get around the bias in the system - anecdotal but provable.
The YCF Diversity Data Report (2024) highlights the widening funding gap for women-led businesses in Scotland, reinforcing the need for urgent policy interventions.Women-led businesses raised a median of £337K per funding round, compared to £900K for men, requiring women to raise 2.67 times more frequently to reach the same capital levels. Only 4.9% of total investment rounds went to women-led businesses, while 49.3% went to men-led businesses.
Total funding secured by women dropped to just 1.4p per £1 in 2024, compared to 40.2p per £1 for men, demonstrating a worsening investment imbalance. Mixed-gender teams saw an increase in funding, receiving 12.7p per £1 in 2024, up from 1.4p per £1 in 2023, suggesting that investors remain more comfortable funding women when they are not sole leaders.
With the above statistic, the £1M annual revenue threshold for equity investment is exclusionary. Many equity investors require businesses to have at least £1M in annual revenue before considering investment. This prevents women from accessing the capital needed to reach growth stages, whereas male-led businesses more easily secure funding earlier in their trajectory. This is reinforced and the barrier doubled down on with public funding bodies such as The British Business Bank’s Regional and National Investment Fund, and Scottish National Investment Bank - which only offers equity investment to businesses reaching this threshold.
While overall success rates for ethnic minority applicants in the Women in Innovation competition were similar to white applicants, qualitative data from LFMW’s community highlighted concerns over assessors’ lack of cultural awareness. Women from ethnic minority backgrounds reported that their projects were undervalued and that assessors often failed to recognise market potential in diverse communities. According to reports by BACKLIGHT, out of 200+ black entrepreneurs, 56% said they only received funding once they’d established their business, compared to 35% of white business owners, adding further barriers.
Neurodivergent and disabled female entrepreneurs face additional challenges. The rigid and complex application processes for IUK grant funding disadvantage neurodivergent and disabled applicants. Word count limits, unclear guidance, and inaccessible formats make it harder for these entrepreneurs to present their businesses effectively.
Limited access to investment networks restricts opportunities. Women are excluded from high-net-worth investor circles, where deals are often made through informal networks (82% of all VC backed startups come from warm introductions and 91% of UK angel investors are male, with a concentration in London and the South East).
Many well-intentioned programs train women in entrepreneurship and funding readiness, but without access to investment networks, funding, and sponsorship, they fail to address systemic inequities. This shifts the burden onto women rather than fixing the barriers they face. These programs are also time-consuming and require childcare and business cover, adding further hurdles.This exclusion prevents them from securing early-stage capital, which is often necessary to meet the criteria for larger investments later on.
Female-led businesses struggle to access procurement opportunities. Government and corporate supply chains often favour established, male-led suppliers, making it difficult for women-led businesses to scale through commercial contracts. In the UK, women-owned businesses win less than 5% of corporate and public sector contracts. This underrepresentation hinders the growth and scaling potential of women-led enterprises.
The irony in all of the above, is that when women are funded they tend to outperform male founders.
Women face persistent gender pay, pension, and wealth gaps—yet the primary route to business funding requires already having capital. Public sector funding bodies reinforce this disparity through match-funding requirements and high ARR thresholds, which disproportionately exclude women, minorities, and those without inherited wealth. This constitutes indirect discrimination under the Equality Act 2010 and should be reviewed under Equality Impact Assessments and the Public Sector Equality Duty. These barriers are not a reflection of business viability. Female-led businesses are commercially successful and deliver strong returns, yet they remain underfunded due to systemic investment biases. Removing these barriers would unlock high-growth opportunities that benefit both investors and the economy.
The UK R & D tax credit scheme has also become radically exclusionary by only supporting innovation that advances the fields of science and technology overall (meaning not to just innovate with technology, but to create an advancement that pushes the fields of science and technology only) - and recent overzealous compliance checks are detrimental to small innovative businesses of both genders - but more so women when coupled with the other barriers they face in securing funding. Additionally the process for application and claims is complex and often requires specialist support, typically costing 15 -20% of the claim amounts.
Women face the greatest barriers in high-growth, investment-intensive sectors such as deep tech, AI, fintech, and STEM, due to gendered assumptions leading to bias as well as industries where funding and procurement structures disadvantage female-led businesses.
Public investment strategies shape sectoral opportunities. Government priorities determine which industries receive funding and support. If decision-making panels lack gender balance, then sectors where women innovate may be overlooked. 19.1% of active UK companies are female-led, but with company registrations down and 198,046 businesses struck off the records at 2024’s closing (Beauhurst report 2025 in The Times), the time to invest in women is now.
Women are underrepresented in deep tech and STEM fields. Women account for only 17.4% of deep tech founders, and only 15% of seed funding in deep tech goes to women-led businesses. Even when they do secure funding, female-led ventures receive lower valuations and less follow-on investment, making it harder to scale.
Fintech and AI funding favours male-led businesses. Despite strong innovation in these sectors, male-dominated investor networks and funding panels lead to lower funding approval rates for women-led ventures.
Creative industries, where many women-led businesses operate, receive less venture capital. Traditional investors prioritise high-growth, scalable technology startups, undervaluing creative businesses despite their economic potential.
Health and life sciences innovation is not prioritised in public funding. Women-led businesses in biotech, medical research, and life sciences struggle to secure investment despite addressing major healthcare challenges. Female-led ventures in these fields raise 23% less than their male counterparts. Bias increases when women founders explicitly advocate for gender-specific health innovations.
Procurement structures disadvantage female entrepreneurs. Women face additional barriers in securing public sector contracts and corporate procurement opportunities. Government frameworks often favour large, established suppliers, limiting opportunities for smaller, women-led firms.
Women Receive Smaller Loan Amounts (BBB 2024)
Funding Decision-Makers Are Predominantly Men
Grant amounts in female dominated industries are often offered at lower values.
Ensure women are represented in defining innovation priorities. Gender diversity in investment committees, innovation boards, and public funding decision-making panels would lead to more equitable funding distribution.
Make gender-disaggregated data mandatory across all funding sectors. Currently, funding decisions in AI, fintech, and deep tech do not track the gender of business leadership, making it difficult to assess disparities.
Adjust funding taxonomies to ensure women-led innovation is recognised. Many female-led innovations do not fit neatly into existing government R&D categories, limiting access to funding.
Improve procurement policies to ensure fairer access for women-led businesses. Public sector and corporate supply chains should adopt supplier diversity strategies to increase contract opportunities for women-led firms.
Reassess match funding requirements and high barrier requirements such as £1 million ARR from innovation funding for women.
Women entrepreneurs face systemic funding disparities, exclusion from investor networks, and biases in financial decision-making. Addressing these barriers requires structural changes in funding systems, expansion of the pool of female investors, and reducing the caregiving burden that limits women’s ability to focus on business growth.
Public funding mechanisms do not track gender-disaggregated data. The British Business Bank and Innovate UK do not collect gender-based data on business ownership or funding success, making it impossible to monitor progress.
Women face high costs when applying for funding. The median time spent applying for Innovate UK grants is 60 hours, and 17% of applicants pay for professional bid-writing support.
Funding success does not reflect applicant quality. In the Women in Innovation competition, 51% of applicants scored over 70%, yet only 3.44% received funding, leaving many strong applicants with innovative, growth-potential businesses unfunded.
Bias in investment decision-making leads to lower funding allocations for women. Women-led businesses receive less follow-on investment than male-led businesses, limiting their ability to scale.
Venture capital funding favours male-led businesses. Women receive just 1% of private investment, and less than 2% of venture capital in the UK goes to all-female founding teams while they represent 20% of founders.
In the case of FemTech, women are penalised if they are perceived as explicitly advocating for gender-specific health innovations. This bias is removed, however, if there is adequate media attention to the condition (e.g. Menopause) as it increases investor/assessor awareness and understanding.
Removing barriers such as having already secured equity investment, or having existing sources of wealth from public sector funding opportunities.
Reform R & D tax credits to include female-led innovation more broadly.
Women need greater access to investor circles and procurement opportunities. Many investment deals and corporate contracts are secured through closed, relationship-based networks, where women are underrepresented. We recommend a variety of Meet the Investor/Meet the Entrepreneur events.
Male-dominated investment panels reinforce exclusion. Women are less likely to be invited into high-net-worth investor circles, meaning they miss out on informal opportunities for funding introductions. Mandate diverse investment and assessment panels.
Expanding procurement access by accepting bids from smaller, women-led businesses and consortia ensures greater competition and diversity in supply chains. Current procurement frameworks favour large, often male-dominated suppliers, and adjusting these policies will create more opportunities for female entrepreneurs to secure government and corporate contracts.
Women are gaining more influence at smaller VC firms—those with less than €50 million in AUM—but the percentage of female decision-makers at larger firms fell to 15% last year. The number of female angel investors dropped to the lowest count since 2018.
Women remain underrepresented in angel investment. UK Business Angels Association data shows that 91% of angels are male and 93% are white, only 7% of UK angel investors based outside London reinforcing systemic exclusion from early-stage investment networks for women and minority founders, especially those outside of London..
Government-backed initiatives to increase female angel investors are needed, as is investment in existing diversity-focused providers. Programs to train and support women in angel investing would create a more diverse investor base, reducing bias at the earliest stages of business growth. In March 2024, the government planned to raise the High Net Worth Individual (HNWI) threshold from £100K to £170K, which would have cut off many female and non-London-based angels. Due to pressure, this decision was reversed, demonstrating the need for government policy to proactively support, rather than restrict, diverse investor participation.
The lack of senior women in venture capital contributes to funding bias. Female VCs are more likely to invest in women-led businesses, yet they remain underrepresented at partner level, and many are leaving the sector due to limited career progression and exclusion from high-value deal-making.
Without structural changes, bias will persist across all investment levels. If early-stage angel funding is male-dominated, it feeds into later-stage venture capital, ensuring that funding pipelines remain biased against female founders. Effectively targeting equitable promotion and addressing gender/ethnicity/disability pay gaps will also enable more women to become angel investors.
Sponsors play a critical role in securing funding and business opportunities. Unlike mentors, who offer advice, sponsors actively advocate for women behind closed doors, ensuring they are introduced to investors, procurement officers, and key industry players.
To implement this, government-backed funding programs could include sponsorship components, requiring investors who receive public money to commit to sponsoring female-led businesses.
Women need more male sponsors to help them enter male-dominated investment and deal-making spaces. The venture capital sector is 90% male-led, meaning men hold the power to introduce and endorse female entrepreneurs in critical funding conversations. Public-private sponsorship programs, modeled on leadership schemes in corporate sectors, can create structured pathways for women to gain these introductions.
Sponsorship counteracts bias in decision-making. Studies show women face higher scrutiny in funding and procurement decisions. Sponsors can challenge this by vouching for female founders’ credibility and ensuring their businesses are taken seriously. Industry-wide sponsorship pledges, similar to the Investing in Women Code, would create accountability for investors and business leaders.
Women in leadership roles can also become sponsors for others. Female founders who break through funding barriers can then continue to actively sponsor the next generation of women entrepreneurs, creating a cycle of inclusion. Incentivising sponsorship through tax reliefs for businesses that actively sponsor diverse founders would help drive sustained change.
A model to follow is Board Apprenticeships whereby they develop a national board apprenticeship scheme pairing experienced female operators with board opportunities, creating pathways that acknowledge expertise even when career timelines include breaks for caregiving.
Access to childcare and elder care remains a fundamental barrier to female entrepreneurship. Women are more likely to take on primary caregiving responsibilities—not just for children, but also for elderly relatives—limiting the time and resources they can dedicate to starting and growing a business. Addressing this requires both short-term business-friendly policies (e.g., subsidised childcare for entrepreneurs) and long-term structural reforms in the care sector. While broader reform of social care and the NHS is a significant undertaking, more immediate interventions, such as flexible childcare grants for entrepreneurs, could help mitigate the impact on women-led businesses.
The ‘double burden’ of domestic labour limits business growth. Research shows women are more likely to bear the majority of household responsibilities, reducing the hours they can spend securing funding, networking, or scaling their ventures.
Lack of structural support keeps female founders at a disadvantage. Without affordable childcare options and business support mechanisms for parent-entrepreneurs, many women are forced to choose between business growth and family responsibilities.
No/Low interest government loans. Targeted lending could transform caregiver entrepreneurship. Government-backed, very low or zero-interest loans designed specifically for entrepreneurs returning from caregiving roles would be transformational. Caregivers often cannot secure traditional financing due to gaps in employment history and reduced earnings during care periods. These loans should offer a 2-year grace period before repayment begins, acknowledging the realistic timeline for new businesses to generate revenue. This represents excellent value for public investment, as the loans would be repaid as businesses succeed, generating economic growth, employment, and tax revenue.
Media plays a significant role in shaping public perception of business success, yet studies consistently show a bias in how male and female entrepreneurs are portrayed. Women leaders are often described in terms of personality traits, family roles, or perceived shortcomings which reinforces gendered expectations, while men are framed as visionary risk-takers and industry pioneers. This influences investor confidence and deal flow, reinforcing funding disparities.
Despite research showing that multilingualism, international experience, resilience through adversity, elite education, and strategic risk-taking are key traits of unicorn founders—traits that many women possess—female entrepreneurs are still discounted.
The media reinforces this bias by portraying women as risk-averse, emotional, or struggling, while men with the same traits are seen as visionary and resilient. Rather than being recognised as calculated decision-makers, women are labeled cautious; rather than being valued for resilience, their adversity is framed as a barrier to success. Women-led businesses often take longer to secure funding due to structural barriers, yet this is misinterpreted as lower viability.
Until investment frameworks recognise these strengths rather than reinforcing outdated biases, high-growth female-led businesses will remain underfunded.
Recent research by Ludovica Castiglia (2024) highlights that investors fund female-led ventures at the same rate as male-led ones—when they are familiar with the issue being addressed. Otherwise, female founders face a penalty for being seen as advocates rather than strategic business leaders, particularly in sectors like FemTech, women’s health, and social impact innovation.
Impact on Female Entrepreneurs
● Funding Disparities: Women struggle to attract investors, customers, and corporate partners without strong media validation.
● Perceived Risk vs. Growth: Female founders are framed as needing support, while male founders are seen as leaders to back.
● Fewer Role Models: Lack of visibility of successful female entrepreneurs means fewer women see entrepreneurship as a viable path.
7. Government could assist in minimising these barriers by:
Supporting business awards and media campaigns highlighting the diversity of female founders, that is, women from non-traditional sectors, with high-growth businesses, from different ethnic backgrounds, with and without disabilities and reflecting diverse personal characteristics and backgrounds. Additionally, role models should reflect all UK regions.
Incentivising media organisations to ensure balanced role model representation when reporting on entrepreneurship, innovation and business leadership.
Government funded finance (grants, loans and equity provision) and business support services (business advice, training, incubation and accelerator interventions) should monitor and publish data, not only on the personal characteristics of those providing and accessing such services but also, on any disparities in representation across promotional materials, events etc. as part of their diversity reporting.
Increasing funding for women entrepreneurs, ensuring ring-fenced funding in non-traditional and emerging, strategic priority sectors such as AI, Fintech, deep tech, Net Zero etc.
Best practices for supporting female entrepreneurship come from international models, corporate initiatives, and structural policy changes that address barriers in funding, investment, networks, and caregiving responsibilities.
Canada’s Women Entrepreneurship Strategy (WES) – A $6B national strategy providing targeted funding, mentorship, and access to financial services for female founders.
Women TechEU (European Union) – Grants of €75,000 plus leadership support for women-led deep tech startups, ensuring access to both capital and networks.
The Nordic Model (Sweden, Denmark, Norway, Finland) – Combines funding, mentorship, and supply chain access to help female-led businesses scale. Public contracts and procurement policies prioritise diverse suppliers, increasing long-term business sustainability for women entrepreneurs.
The U.S. Small Business Administration’s Office of Women’s Business Ownership is a dedicated department with assigned budget and oversight, responsible for fostering increased women’s entrepreneurship, particularly for those under-served or traditionally excluded, through ensuring a more inclusive ecosystem with relevant procurement legislation, training, mentoring, access to finance etc. An independent Board with similar oversight and remit in the UK would ensure long-term provision and change leading to improvement.
Women-Owned Business Certification – Enables women-led businesses to compete for set-aside government contracts administered by the Office of Women’s Business Ownership, helping them break into high-value procurement markets.
Gender-Lens Investing Initiatives (Australia & U.S.) – Government-backed investment funds use gender criteria in funding decisions, ensuring capital flows to female-led businesses at fair rates.
UK Investing in Women Code (2023) – Encourages banks and investors to report gender-disaggregated data, improving transparency. However, participation is voluntary, limiting its effectiveness.
Diversity Quotas in Investment Committees (France, Germany) – Policies requiring gender-balanced investment panels have resulted in higher funding rates for women-led businesses.
Women Angel Investor Programs (Canada, U.S., UK) – Structured programs train and support more women to become angel investors, increasing the number of female-led businesses receiving early-stage capital.
Venture Capital Gender Diversity Programs (Nordic Countries) – Introduced career pathways and leadership development for women in VC, reducing the dropout rate of senior female investors.
Sponsorship Programs for Women Entrepreneurs (Global) – Programs like Breakthrough Sponsorship (U.S.) connect female founders with senior industry figures who advocate for them in funding and procurement deals.
Supplier Diversity Policies (Nordic Model, U.S.) – Government and corporate procurement rules set targets for women-owned businesses, ensuring fair access to public and corporate contracts.
Flexible Grant & Loan Structures (Canada, Australia) – Policies that remove matched funding requirements for government-backed loans and grants, addressing barriers that disproportionately impact women.
Childcare & Family Support Policies for Entrepreneurs (France, Sweden) – Provides government-subsidised childcare and business-friendly parental leave, reducing the caregiving burden on female founders.
Female entrepreneurs face structural funding barriers, exclusion from investment networks, and bias in the way innovation is defined and assessed. The UK government must implement policy interventions that address both funding disparities and systemic biases while ensuring that women are active decision-makers at every level of the investment ecosystem.
Government funding priorities shape what is considered “innovative.”
○ Innovation funding is largely directed toward deep tech, AI, and STEM, while sectors where women-led businesses thrive—health, education, creative industries, consumer goods, hardware and sustainability—receive less priority funding.
○ If women's innovations are not recognised as "high-value", they will continue to be underfunded.
○ High-Social Growth benefits should be prioritised: BACKLIGHT research shows 20% of BME founders start businesses to address community needs, compared to 7% of white founders. These businesses drive economic and social benefits, yet struggle to secure funding. Investing in high-social growth businesses yields long-term financial returns for the government. A healthier, more engaged population reduces public healthcare costs—potentially saving the UK £18 billion annually by the mid-2030s—while increased employment lowers welfare dependency and boosts tax revenues.To maximise these benefits, the government should de-risk early-stage investment through grants, tax incentives, and procurement access, while private capital drives long-term scaling. A blended public-private model ensures sustainability without reliance on government funding.
Who decides what innovation gets funded?
○ Public funding bodies like Innovate UK, UKRI, and BBB have decision-making panels that lack gender diversity.
○ Male-dominated panels reinforce investment biases by undervaluing innovations that disproportionately impact women (e.g., FemTech, caregiving solutions, gender-inclusive AI).
○ We have also observed that many senior female investors, having built their careers in male-dominated environments, often had to adopt traditionally "masculine" traits that reinforce the bias. Ensuring greater diversity in investment panels, alongside experts in bias and decision-making, would help recalibrate these dynamics and lead to more inclusive funding decisions.
Taxonomies used to categorise innovation funding must evolve.
○ Funding bodies use rigid sectoral taxonomies that do not account for cross-sector innovation, such as women-led businesses innovating in caregiving technology, sustainable fashion, or health equity.
○ A gender- and intersectionality inclusive taxonomy would ensure that innovations benefiting diverse populations are eligible for funding.
Solution: Redefine innovation categories to recognise female-led advancements.
○ Expand R&D taxonomies to ensure that underfunded but high-impact sectors (e.g., women's health, creative industries, care tech, and sustainability) qualify for strategic UK innovation funding.
○ Establish gender-balanced innovation boards to set funding priorities.
○ Government investment committees to include not just investors but also experts in bias and decision-making to recalibrate the needle. These specialists, familiar with investment dynamics, can help identify and counteract subconscious biases—ensuring a more balanced and inclusive approach to funding decisions.
○ Mandate public reporting on how funding allocations align with intersectional gender equity.
More Female Angel Investors to Support Women-Led Startups
○ Women account for just 8% of UK angel investors, limiting early-stage investment for female founders.
○ Government-backed female angel investor networks should be expanded, following models like Women in Angel Investing (UKBAA) and Canada’s Women’s Investment Readiness Program.
Retaining Women in Senior VC Positions
○ Women make up only 10% of decision-makers in UK venture capital and are leaving the sector at higher rates.
○ LP funding criteria for government-backed VCs should require gender-balanced investment teams.
○ A targeted accelerator program for female VCs would help create a pipeline of women in senior investment roles.
Mandatory Gender Reporting for Public Funding Bodies
○ Require Innovate UK, BBB, and government-backed VC firms to collect and publish gender-disaggregated data on funding applications, approvals, and allocations.
○ Ensure reporting includes intersectional data (ethnicity, disability, and sector).
○ Ensure investment allocations are broken down by women-only, mixed-gender, and men-only founding teams to monitor progress and identify persistent gaps.
Fairer Grant Distribution Based on Defined KPIs
○ A more equitable allocation of Innovate UK’s £1.1B grant pot should be guided by clear KPIs that measure:
■ The proportion of funds awarded to deserving female-led businesses.
■ Success rates by gender and ethnicity at each stage of the application process.
■ Follow-on investment rates for female-led businesses.
● Women-led businesses are forced to raise smaller amounts more frequently, leading to financial instability and limiting growth.
● Public funding bodies should implement structured follow-on funding mechanisms to ensure that women-led businesses can scale beyond early-stage rounds.
Developing Public-Private Venture Capital Partnerships
○ Establish ring-fenced, multi-year investment programs for female founders in high-growth sectors, aligned with strategic UK economic priorities.
○ Leverage Pension Funds to invest in female founders—allocating a portion of the £425+B UK local government pension funds toward impact investing, following models from Canada and Norway.
Incentivising Lead Investors to Back Female Founders
○ Encourage major lead investors (A16Z, Accel, Balderton etc.) to set the standard for gender-equitable funding, as their leadership influences broader VC trends.
○ Introduce co-investment incentives or preferential LP funding terms for VC firms demonstrating gender-equitable portfolios.
○ Create a public-private matching fund, where government-backed capital de-risks private investment in female-led startups. To achieve this, the government can introduce structured downside protection, covering a portion of early-stage losses, similar to existing models for high-risk sectors like deep tech and clean energy.
○ This does not eliminate investment risk but corrects systemic funding imbalances, ensuring commercially viable female-led businesses receive fair access to capital. Investors still assess viability, but the policy removes bias-driven barriers that have historically restricted funding.
○ Establish an investment transparency index ranking VCs by their funding commitments to female founders, ensuring public accountability and investor reputation incentives.
Gender-Balanced Investment Panels
● Ensure that grant and VC funding panels have 50% female representation.
● Assessors should receive bias training to reduce gender disparities in funding approvals.
Streamlined Application Processes
● Simplify Innovate UK’s grant application process, reducing the 60-hour average application burden that disproportionately affects women-led businesses and benefits everyone.
Supplier Diversity Targets for Government & Corporate Procurement
● Set clear targets for the inclusion of female-led businesses in public and private sector supply chains.
● Provide training and support for female founders to navigate procurement processes.
Tax Relief for Investing in Female Founders
● Expand the SEIS/EIS tax relief scheme to provide higher incentives for investments in female-led startups.
● Given that 86% of angel investors increase their investment due to EIS/SEIS tax relief, expanding these schemes to prioritise female founders would be a highly effective intervention.
Flexible Lending Models to Increase Female Access to Capital
● Reform business lending risk models to reduce reliance on personal guarantees, which disproportionately disadvantage women.
● Introduce government-backed loan guarantees to improve financial institutions’ risk tolerance for lending to female entrepreneurs.
The UK does not currently track female entrepreneurship success effectively because public funding bodies fail to collect essential gender and leadership data. We also recommend disaggregated data with respect to ethnicity, disability and neurodiversity, as examples, to ensure wider inclusion.
Without accountability measures, gender bias in investment will persist, limiting the UK's economic growth potential.
Mandatory data collection, transparency in funding decisions, and systemic reforms are required to ensure female entrepreneurs receive fair and equitable access to capital.
LFMW calls on the UK Government to implement these recommendations to close the gender funding gap, drive economic inclusion, and unlock the full potential of women-led businesses.
Innovate UK (UKRI FOI 2024/01252) – Partial Tracking of Gender in Grants
○ Funding allocation is tracked by the gender of the lead applicant but not by business ownership, leadership, or equity stake.
○ Women-led applications received £452.6M vs. £1.24B for men-led applications, but this does not reflect how many female-founded or female-led businesses were actually funded.
British Business Bank (BBB FOI 24-033) – No Mandatory Gender Reporting
○ The Investment Fund for Scotland does not track gender data, meaning no official data exists on how much funding goes to female entrepreneurs.
○ Fund managers are not required to report the gender composition of the businesses they fund.
○ The Investing in Women Code is voluntary, limiting accountability in private investment decisions.
VC and Angel Investment – Persistent Gaps in Private Funding Data
○ Women-led startups receive less than 2% of venture capital, but this is based on estimates, as many private firms do not publicly disclose gender-disaggregated funding data.
○ There is no tracking of follow-on investment rates for female-led businesses, making it impossible to measure long-term funding disparities.
○ The gender of investment decision-makers is not consistently reported, despite evidence that more female investors lead to more female-led investments.
Intersectional Data is Limited
○ Funding statistics rarely account for ethnicity, disability, or socioeconomic background, despite clear evidence that Black, Asian, and disabled women face greater barriers to funding.
○ No longitudinal tracking exists on how funding disparities affect female entrepreneurs over time.
Longitudinal Small Business Survey
● Cross-sectional data while useful, this is limited in not being able to track respondent firms over time across surveys to identify barriers or growth.
Mandatory Gender-Disaggregated Data Collection in Public Funding
○ Require Innovate UK, UKRI, and BBB to track and publish gender data beyond lead applicants, including:
■ Business ownership and leadership breakdown (CEO, founder, equity stake)
■ Application data must be made publicly available. While we can track how many women receive grants, we lack visibility on how many applied per funding stream and their success rates. Without this, disparities—especially in larger funding pots—remain hidden. Releasing full application and success rate data is essential for identifying and addressing inequities.
■ Follow-on funding rates for women-led businesses
Intersectional Analysis in Female Entrepreneurship Data
○ Require ethnicity, disability, and regional breakdowns in gendered funding reports to ensure policies address all women, not just white, well-networked founders.
○ Track sectoral distribution of female-led businesses to assess if women are being excluded from high-growth industries.
Transparent Reporting for VC and Private Investment
○ Make gender-disaggregated reporting mandatory for venture capital and angel investment firms receiving government support.
○ Amount of private and public sector funding awarded to female founders.
○ Comparison of funding allocated to women-only, mixed-gender, and men-only founding teams.
○ Median amount raised per funding round by gender.
○ Number of funding rounds required for female vs. male-led businesses to reach the same capital levels.
○ Tracking whether women-led businesses receive follow-on funding at the same rate as male-led businesses.
○ Breakdown of funding access across different growth stages (pre-seed, seed, Series A, growth capital).
○ Establish an Investment Transparency Index, ranking firms based on their funding allocation to female-led businesses.
○ Require fund managers to disclose the gender composition of their investment portfolios.
Tracking Outcomes Beyond Initial Investment
○ Longitudinal tracking of female founders to identify where the most significant drop-offs occur and what interventions make the most difference.
○ Data collection beyond funding metrics, capturing wellbeing, support systems, and stress factors to provide a more holistic picture of female entrepreneurship.
○ Introduce longitudinal studies tracking female-led businesses post-funding, examining:
■ Survival and growth rates
■ Revenue and job creation impact
■ Access to follow-on funding
■ Procurement contract success rates
Global Comparisons & Benchmarking
○ Align UK data collection with OECD, EU, and US tracking frameworks, ensuring comparability with international best practices.
○ Establish cross-border collaboration models to analyse female entrepreneurship success beyond national funding programs.
Without consistent, gender-disaggregated tracking, systemic barriers in funding allocation remain hidden. Establishing mandatory reporting requirements for public and private investment bodies would provide transparency, ensuring that progress can be measured and policy interventions are evidence-driven.
LFMW remains committed to working with policymakers, investors, and industry leaders to implement these changes.
Barriers to Accessing Finance
Public Funding Requirements Exclude Women
Debt Financing & Personal Guarantee Barriers
Bias in Assessment Processes & Investment Decisions
Barriers for Ethnic Minority Women
Challenges for Neurodivergent & Disabled Women
Exclusion from Investment Networks
Barriers in Public & Private Procurement
Public Investment Strategies & Sectoral Funding Biases
Underrepresentation in STEM, Deep Tech, and AI
Fintech & AI Funding Disparities
Challenges in Creative Industries
Health & Life Sciences Innovation Barriers
Procurement Barriers for Female-Led Businesses
Structural Barriers in Public & Private Funding
Access to Investment & Business Networks
The Role of Female Investors in Reducing Bias
The Power of Sponsorship in Business & Investment
The Impact of Caregiving on Female Entrepreneurship
Media Bias in Reporting on Female vs. Male Entrepreneurs
International Models for Female Entrepreneurship Support
Addressing Bias in Funding & Investment
Building Stronger Female Investment Networks
Making Business Funding & Procurement More Inclusive
1. Defining Innovation in a Gender- and Intersectionality Inclusive Manner
● BACKLIGHT Research (2023): 20% of BME founders start businesses in response to community needs, compared to 7% of white founders, yet these ventures struggle to secure funding.
● The Gender Index (2022): Women-led businesses are underrepresented in high-growth sectors, receiving less funding despite contributing significantly to the economy.
● UK Treasury Review (2023): Women’s health and care innovation receive disproportionately low investment, despite clear market demand and economic benefits.
● IPPR Report (2024): A healthier, more engaged population could save the UK £18 billion annually by the mid-2030s, reinforcing the economic value of investing in social impact ventures.
● Global Entrepreneurship Monitor (2023): Women are more likely to start businesses in sectors undervalued by traditional innovation funding models, limiting their access to capital.
2. Increasing Female Representation in Investment Decision-Making
● UKBAA Report (2023): Women account for just 8% of UK angel investors, limiting early-stage investment in female-led startups.
● British Business Bank (2024, FOI 24-059): Only 27% of Investment Committee members are women, while many committees do not track gender composition at all, meaning biases go unchecked.
● BVCA Diversity in Private Equity Report (2023): Women make up only 10% of decision-makers in UK venture capital and are leaving the sector at higher rates, reducing female-led funding allocations.
3. Implementing Gender-Specific Investment Targets
● YCF Diversity Data Report (2024):
○ Women-led businesses raised a median of £337K per round vs. £900K for men, requiring 2.67x more rounds to reach the same funding levels.
○ Total funding secured by women dropped to just 1.4p per £1 in 2024, while men received 40.2p per £1, widening the funding gap.
○ Only 4.9% of investment rounds went to women-led businesses, while 49.3% went to men-led businesses.
○ Mixed-gender teams saw an increase in funding (12.7p per £1 in 2024), suggesting investor bias is lower when women are not sole leaders.
● British Business Bank FOI (24-033): No gender tracking in investment fund allocations, making it impossible to measure whether women entrepreneurs are receiving fair funding access.
4. Scaling Female-Led Businesses Through Public-Private Investment
● Investing in Women Code (2023 Report): Women still receive a disproportionately low share of VC investment, despite government-backed initiatives.
● British Business Bank FOI (2024/01252): Women-led applications received £452.6M vs. £1.24B for men-led applications across Innovate UK competitions.
● Canada & Norway Pension Fund Models (2023): Both countries allocated a portion of pension funds to impact investing, generating positive returns while improving gender diversity in investment.
● Extend Ventures Report (2022): Black female founders in the UK secured just 0.24% of VC funding, highlighting persistent investment bias.
5. Reforming Assessment and Application Processes
● Innovate UK Grant Survey (2024):
○ The average application process takes 60+ hours, disproportionately impacting women, caregivers, and neurodivergent applicants.
○ 17% of applicants paid for professional grant writing, an additional barrier for underrepresented founders.
○ Strict word counts and rigid criteria disadvantage businesses with innovative but unconventional models.
6. Expanding Procurement and Supply Chain Access
● UN Women Procurement Report (2022): Women-owned businesses secure less than 1% of global public procurement contracts, reinforcing systemic barriers to scaling female-led enterprises.
● UK Government Procurement Report (2023): Women-led businesses win less than 5% of corporate and public sector contracts, despite clear supplier diversity policies.
7. Introducing Financial & Tax Incentives
● HM Treasury SEIS/EIS Report (2023): 86% of angel investors increase investment due to EIS/SEIS tax relief, suggesting tax-based incentives could significantly increase funding for female founders.
● The Gender Wealth Gap Report (2023): Women hold significantly less personal wealth, making personal guarantees in business lending disproportionately restrictive.
● British Business Bank FOI (24-059): Women received 35% of total Start-Up Loan value despite making up 41% of recipients, indicating funding disparities even when loans are secured.
March 2025
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