As countless innovative female founders continued to make waves across Europe last year, the complacent amongst us might have claimed that, as an ecosystem, we’d now achieved our goal of meaningful founder gender equality. And while it’s positive that the days where entrepreneurship was an exclusive men’s club are well and truly behind us, still plenty needs to be done to both encourage women to start businesses and to engender an investment environment where capital flows as easily to male entrepreneurs as it does to female ones.
That’s because the sad reality is that only 21% of startups created in the UK last year were founded by women. More needs to be done to provide equal opportunities because the merits of founder gender diversity are significant. Female founders are often better placed to address different problems in society like those specifically faced by women themselves such as solving for the economic disadvantages of motherhood or combating unfair maternity leave policies. Women also tend to approach commercial challenges in new and exciting ways, bringing unique perspectives to age old problems. And female led teams are often more collaborative, meritocratic and this might be why some research shows that women founders build businesses that generate more relative revenue than their male counterparts.
Despite these advantages, the data doesn’t lie. With only 1 in 5 businesses in the UK being founded by women, there are evidently robust structural barriers preventing many women from starting a business. I believe a large reason for this is that women are much less likely than men to get the funding required to start or grow a company. Sadly, despite industry-wide attempts to create a more inclusive investment ecosystem where capital is readily accessible for female founders or those from underrepresented communities, shifting the needle on where investors put their money has been a slow process. Recent research by BCG showed that the average investment in companies founded or co-founded by women was half that of what is raised by only male-founded companies.
At Seedrs we have long recognised that there are many great female entrepreneurs and that failing to invest in them on a large scale is leaving value on the table. Indeed, according to the World Bank, women-owned firms in the U.S, are growing at more than double the rate of all other firms and contributing almost $3 trillion to the economy.
This understanding of lost value has been reflected on our platform where we have made significant progress in driving positive change. Last year, almost 30% of successfully funded campaigns on the Seedrs platform were led by female entrepreneurs, which is considerably more than the industry average. As part of that, we helped women-led campaigns to raise £56 million and eight of those campaigns raised more than £1m.
Looking back further, our rich history of championing women led businesses includes backing truly transformational businesses like Ripple (founded by Sarah Merrick and who Seedrs has helped to raise £6.1m+ across 6 rounds from 7,600+ investors) and Oddbox (founded by Emilie Vanpoperinghe and who Seedrs has helped to raise £17.2m+ across 4 rounds from 3,300+ investors).
But while we have made a start, we need to do more. And this starts at home. In January, after four great years as Chief Commercial Officer, it was a privilege to be asked to take on the role of Managing Director and to lead the next stage of Seedrs’ growth as part of Republic. A key focus for me as part of this next phase is to continue to build a team where diversity is the benchmark and not the goal.
Beyond what I can change at Seedrs, I am excited for the potential of Seedrs to take a clearer leadership role in supporting female-founded ventures across Europe. Last year, Seedrs became licensed under new EU regulation for equity crowdfunding providers. This new unified framework levels the playing field for the industry and lays the foundations for a thriving sector that is best able to support bustling European startup hubs as well as ambitious investors across the continent. In particular, the licence will give us (and other platforms) power to go further in terms of supporting women entrepreneurs to successfully raise capital and fuel their next stage of growth. The future for budding female entrepreneurs across Europe has never been brighter and, for that, I am immensely excited. Watch this space.
John Lake – Managing Director, Seedrs (Part of Republic)
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