Data Reveals a Decline in VC Funding for Female Founders
— Claire Kettell, Founder of SalonServe
UNITED KINGDOM, September 7, 2023/EINPresswire.com/ — Despite the ongoing efforts to promote diversity and inclusion in the start-up ecosystem, a recent study has revealed that women-led start-ups continue to face significant challenges in securing venture capital (VC) investments. The research, conducted by various sources, highlights the alarming statistic that women-led start-ups receive less than 3% of all VC investments.
The data reveals a decline in VC funding for female founders in recent years. In 2020, only 2.3% of VC funding went to women-led start-ups, a decrease from the previous year’s 2.8%. This persistent underinvestment in women-led ventures poses significant challenges for female entrepreneurs striving to launch and grow their businesses.
Several factors contribute to this funding disparity. One factor is the lack of gender diversity within the VC industry itself, with only approximately 12% of decision-makers at VC firms being women. Furthermore, research suggests that investors often stick to their existing networks, which tend to be male-dominated and favour tech companies led by men.
We spoke with Claire Kettell, founder of renowned beauty and hairdresser salon supplier SalonServe, established in 1994, for her views. She told us:
“Despite the progress that has been made, the beauty industry still operates within a broader societal context where gender biases and inequalities persist and need to respond proactively. This entails fostering an environment that encourages and supports investment in women-led start-ups and investing in initiatives that prioritise inclusivity.“
The consequences of this funding gap are far-reaching. Beyond the financial implications, it affects the overall job market for women and hinders efforts to address gender inequality. Women-led start-ups have been found to employ more women, contributing to a more diverse and inclusive workforce. Moreover, research indicates that women-led businesses deliver higher revenue per dollar invested and often have a strong focus on making a social contribution and building positive employee relationships.
To address this persistent issue, industry leaders, policymakers, and investors must take conscious steps to increase funding for women-led start-ups and promote gender diversity within the VC ecosystem. Initiatives that foster mentorship, provide access to resources and promote networking opportunities for female entrepreneurs can play a crucial role in bridging the funding gap.