Breaking barriers to help more female entrepreneurs access much needed investment
Jenny Tooth, OBE and and UKBAA CEO, on the lack of investment to female-led businesses and how we tackle this problem.
Jenny Tooth, OBE is CEO of the UK Business Angels Association, the trade body for angel and early stage investing, representing over 15,000 investors around the UK. Jenny has over 20 years’ experience of facilitating SMEs access to investment, both in the UK and internationally. We interviewed Jenny as part of our Fuelling Ambition conference on the challenges females face looking for investment, and how we tackle this problem. Jenny will also be presenting at our Fuelling Ambition Conference on May 10th.
“It is heartening to see that many more women here in the UK are identifying the potential to establish and build a successful business and I meet so many fantastic innovating women entrepreneurs. However, many of these female founders are missing out on the opportunity to access the benefits of external investment and notably the support that angel investors can bring to help grow their business.
Angel investment is the most significant source of risk capital for start-up and early stage businesses in the UK, bringing not only finance, but access to vital business mentoring and expertise to enable entrepreneurs to achieve their high growth potential.
Yet currently only around 10% of angel investments are being made in women founders and pitching events still tend to only have one or two women, at most, among the line-up of presenting entrepreneurs seeking investment.
There may be many reasons for women not coming forward to access equity, including potentially a lack of understanding about the process and how to pitch to investors. It is also notable that, one of the main concerns that many women entrepreneurs still encounter when approaching equity investment is that this remains a very male-dominated environment. For many women pitching to a room generally entirely filled with men investors is, for many, an extremely intimidating experience.
One of our biggest challenges affecting women’s access to equity is that only 14% of business angel investors in the UK are women. Whilst there are clearly many women achieving considerable success in their business and professional lives, few of these women have recognised the opportunity to use their spare financial capacity and business experience to back early stage businesses, especially those led by female founders. To address this, UK Business Angels Association is spearheading a campaign to access this untapped pool of risk capital with a view to increasing the proportion of women investors to 30%. This has included an important piece of research which we carried out among 200 women across the UK during 2017 with a view to understanding the barriers and challenges that are holding women back from angel investing. Our research revealed that many women with relevant financial capacity and business experience lacked understanding of the opportunities to be an angel investor and were also unaware of the tax breaks available to mitigate risks.
They lacked knowledge of the investment process, especially of the benefits of syndication and were unaware of any women among their peers who angel invested – yet all expressed interest in supporting women entrepreneurs.
Armed with this knowledge, the trade body is now undertaking an active programme of awareness raising, recruitment, education and skills development; also involving existing women angels as role models to encourage more women to engage in angel investing, whilst ensuring that existing angel groups are welcoming to new female investors.
I hope that these measures to increase the pool of women angels and create a more diverse equity market, combined with initiatives such as Newable’s Fuelling Ambition programme, will result in many more women entrepreneurs successfully accessing the investment they need to build and scale their business in the years to come.”
For more information on our Fuelling Ambition conference and to book tickets, visit www.FuellingAmbition.co.uk or email us at FuellingAmbition@newable.co.uk