A new report by the government’s Invest in Women Taskforce, has revealed some disappointing statistics. Female-led businesses received just 1.8% of private-equity investment, in the first half of this year, down from 2.5% in 2023. An already poor situation for women entrepreneurs and SME leaders appears to be getting worse.
Numerous, innovative women-led start-ups have been held back due to a lack of finance. Fewer than 6% of active equity-backed companies were founded by women.Melissa Snover, founder and CEO of international nutrition brand, Nourished, which has sold 50 million units worldwide, feels urgent action needs to be taken by government, investment organisations and women founders themselves.
I have been lucky to achieves some significant success as a female entrepreneur. Nourished, a 3D-printed nutrient gummy brand, has just expanded into pharmacies Greece, Spain, Belgium and Switzerland, in partnership with French pharmaceuticals giant UPSA. We are already available online and in Japan, the UK, US, France and Italy, and have sold more than 53 million units. But a great deal of this is down to me being able to find supportive investors who share Nourished’s vision. In 2020, I raised the highest female founder seed round in UK history for Nourished’s parent company Rem3dy Health. While women-led companies have increased from 16% in 2018 to 20% now, my fundraising story is still too rare.
The Treasury’s Rose Review stated that “up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as men”. So it’s time for investors, wider business and female entrepreneurs themselves to take much more positive action to change things.
Greater government support
There are some promising schemes out there to help women launch and grow start-ups and SMEs. The Invest in Women Taskforce aims to establish a pool of more than £250 million for private investment in women firms. I was honoured to be named as one ten inaugural members of Department for Business & Trade’s (DBT) Venture Capital Unit’s inaugural Female Founders initiative. This recognises promising female-led tech business and will give Nourished and Rem3dy Health a tremendous opportunity to showcase our products and potential to the DBT’s extensive network of VC investors.
But while such schemes are extremely welcome, they are too few of them and they need more funding. Is £250 million really going to make that much impact when I know from experience that establishing just one SME can take several million pounds of investment from multiple sources? The recent decision by government-supported agency Innovate UK to scrap a special investment programme for female entrepreneurs felt like a great mistake.
We need more government promotion of the £250 billion-boost more female-fronted businesses can bring to the UK economy. More initiatives such as the Seed Enterprise Investment Scheme which offers tax breaks for people investing in small start-ups, with founders able to receive up to £250,000. Or the Lifted programme that gets more funding for female founders in the Birmingham area. It needs to be made clear that investing in women entrepreneurs is not just a nice thing to do – it is hugely beneficial to investors and the country as a whole.
Getting rid of bias
Though business remains predominantly male dominated, we have largely moved past the era of women being openly discriminated against. But unconscious bias and unhelpful stereotypes remain. I have encountered them on several occasions. Investment managers tend to focus more on risks when considering putting money into female-led businesses than they do with male ones. There may be less faith in the determination and resilience of women to overcome the numerous hurdles they’ll encounter when building a company. Male investors may not truly understand or see the potential of the types of business that women often found, such as wellness or sustainable products.
This way of thinking needs to be challenged through bias training, throughout the investment sector. There needs to be more women in senior leadership roles, too. Just 12% of UK investment trust managers are female, for instance.
Women Backing Women encourages more women to become angel investors in female-led companies and projects like these can have a tremendous positive effect.
More visibility
If you look down the list of speakers at most business or investment conferences, most of them will be men. Organisers have made laudable efforts to increase female participation, but we are still a long way from parity, and at networking events and on panels, I am almost always in the minority as a women entrepreneur. From greater incentives for women to attend events to finding more speaking slots for them, event coordinators need to be as proactive as possible in making sure there are accessible opportunities for women to showcase their businesses and make investor contacts.
This extends to awards and media business coverage. When there’s an opportunity to feature a woman, on merit, it should always be taken.
Mentoring matters
More mentoring and support networks for female entrepreneurs are needed. Existing female leaders and other business people should share their investment experience with female founders. Female entrepreneurs should build and join support networks, including through existing frameworks, such as chambers of commerce, that provide encouragement, resources, advocacy, and advice. I’m very proud to work with Buy Women Built, a programme designed to inspire and support female founders.
Telling tales
The best investment presentations usually tell a good story. This might be anything from how a business created an innovative product to how it bounced back from failed ventures or financial difficulties. They may not always realise it, but female business leaders often have very strong stories, such as overcoming prejudice in a male-dominated sector or successfully juggling family responsibilities with SME building. They shouldn’t hold back from using their personal tales to engage with investors, speaking honestly and openly. After all, investing is to some extent an emotional decision, so female leaders need to connect with people and take them on a journey
Focus on purpose
I’ve noticed in my career, that businesses which solve a problem for individuals or society, rather than just focusing on profit, tend to attract investment more easily. Women often bring a strong sense of purpose and empathy to business, perhaps developing companies around improving health conditions or community assets, for example. This purpose is a valuable asset and needs to be exploited when courting investment.
Melissa Snover is CEO and founder of Nourished. It produces 3D-printed personalized-nutrition gummies and a range of tailored nutrition gummies for everything from the menopause to better sleep, immunity, skin health, and child health. For more information, visit Nourished
