Fundraising is a critical element in building and scaling a startup, but for women entrepreneurs in the UK, it often comes with unique challenges. Despite progress in the entrepreneurial ecosystem, women-led startups in the UK still face significant obstacles in accessing venture capital (VC) funding.

In 2023, gender disparity in VC funding remained stark, with only 3% of capital going to all-female founding teams, and 15% to mixed-gender teams.  All male teams secured 82% of the funding.

Women-led businesses in the UK secured only a small percentage of total VC funding, reflecting a persistent gender gap. According to recent reports, just 3% of UK venture capital went to all-female founding teams, while mixed-gender teams received 15%. In contrast, all-male teams continued to dominate, securing 82% of the funding​ (Venture Capital Journal).

One of the key challenges contributing to this disparity is the unconscious bias within the venture capital community.

Many investors tend to back entrepreneurs who share similar backgrounds or characteristics, often resulting in male investors favouring male-led startups.

Women entrepreneurs frequently face tougher questioning and more rigorous scrutiny during the pitching process, making it harder to secure funding.

Despite these challenges, women entrepreneurs in the UK are finding ways to break through the barriers. Building strong networks and seeking out investors who prioritise diversity and inclusion have proven to be effective strategies. Initiatives such as HM Treasury’s Women in Finance Charter, Diversity VC and Angel Academe are actively working to support women entrepreneurs by connecting them with investors who are committed to fostering a more inclusive venture ecosystem.

Moreover, the rise of female venture capitalists in the UK is starting to shift the landscape. These investors understand the unique challenges women face and are more likely to invest in female-led startups, helping to gradually close the funding gap. As more women enter the venture capital field, the opportunities for women entrepreneurs to secure the capital they need are expected to increase.

Women entrepreneurs are becoming increasingly adept at articulating the value and potential impact of their businesses, which is crucial for capturing investor interest. By clearly communicating their vision and business strategy, they are better positioned to secure the necessary funding to grow their companies.

While the UK's fundraising landscape still presents challenges for women entrepreneurs, the progress being made is encouraging. By continuing to build supportive networks, engage with diversity-focused investors, and confidently present their business cases, women entrepreneurs are successfully navigating the fundraising process and securing the capital they need to succeed.

Sapphire Capital Partners LLP is a signatory to HM Treasury's Women in Finance Charter and a supporter of the BBB's Investing in Women code. Please check out our commitment to diversity, equity page on the Sapphire website to find out how we are progressing with our efforts towards improving equity and inclusivity in our sector.

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