Rachel Reeves warns of lost opportunities if UK’s female founders are overlooked

This article is republished from The Financial Times

Chancellor Rachel Reeves has warned that too many female entrepreneurs are missing out on funding because male-led investment committees too often back founders who are “like them”.

Speaking at a reception held in Number 11 Downing Street on Tuesday night to mark a government-backed task force raising £635mn for female-led businesses, Reeves said that supporting women founders and investors was “absolutely crucial” for economic growth.

“Men do not have the monopoly on good ideas,” Reeves told the room of around 100 predominantly female leaders.

“And yet they raise the money for their businesses because, sadly too often, people that are investing are looking for people like them to invest in.”

At an event held the previous evening focusing on British growth companies such as Huel, Quantexa and Moneybox, there were not “enough women in the room”, she added.

Only 1.3 per cent of equity investment in the UK has gone towards female-led businesses so far this year, compared with 80.1 per cent for those started by male founders, according to data from Beauhurst cited in the Invest in Women Taskforce Annual report published today. About 18.7 per cent of funding went to mixed-gender teams.

The Invest in Women Taskforce, which is backed by the Department for Business and Trade and the Treasury, was set up last year to address the funding gap between male and female entrepreneurs.

It started with an initial goal of £255mn but has £635mn raised so far, including £130mn of funding from the British Business Bank. Other investors include Barclays, M&G, Morgan Stanley, the BGF, Visa Foundation and Aviva.

Debbie Wosskow, co-chair of the Invest in Women Taskforce, said the lack of funding for female entrepreneurs meant the UK was “missing out on an enormous slice of economic growth”.

The growth opportunity for supporting female-led businesses was worth £250bn, said Debbie Crosbie, chief executive of Nationwide, which has committed £25mn to the Invest in Women fund.

Of the current British growth companies with funding, only 2,400 were run by women compared with 15,000 run by men, Crosbie added.

Reeves has recently come under fire from opposition leader Kemi Badenoch, who mocked the chancellor for “whining about misogyny and mansplaining”.

The criticism from Badenoch followed remarks Reeves had made pre-Budget about patronising responses she had received over her handling of the economy.

At the Downing Street event, the chancellor said one of the most important aspects of her role was “to show women and girls there is no limit to their ambition and what they can achieve”.

Reeves highlighted that since becoming chancellor a year and a half ago, she had redecorated Number 11’s reception room and replaced the artwork with portraits of women by female artists.

There is now a model of suffragette leader Millicent Fawcett by artist Gillian Wearing, as well as portraits of Queen Elizabeth and Sarah Churchill, Duchess of Marlborough, a large watercolour by modern artist Angelina May Davis and a display focused on early editions of Agatha Christie books.

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