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UK's New Fund Targets Investment for Women Entrepreneurs

The UK government has thrown its weight behind a new initiative aimed at directing more investment toward female-led startup teams. At the heart of this initiative is the creation of a £250 million “fund of funds”.

The Invest in Women Taskforce: A Catalyst for Change

Launched in March 2024 by entrepreneur Debbie Wosskow and Barclays Bank executive Hannah Bernard, the Invest in Women Taskforce aims to create a more supportive funding environment for female entrepreneurs. This initiative aims to increase capital available to women while encouraging more women to become investors.

The Statistics Speak for Themselves

The need for this initiative is evident in the stark realities faced by women entrepreneurs in the UK. The statistics are sobering:

• In the first half of 2024, 86% of capital went to all-male founder teams, a worrying increase from 80% in the first half of 2023.
• Meanwhile, the share of capital going to businesses founded by women dropped from 2.0% to 1.8%.

A Global Goal: Shifting the Funding Landscape

The Invest in Women Taskforce has set an ambitious goal: to create the largest funding pot in the world dedicated to supporting female-powered businesses.

• The £250 million fund will be sourced primarily from private sector entities such as banks and pension funds.
• These funds will be made available to investment firms (GPs) with the condition that they invest in female-led businesses.

Government Backing and Convening Power

The initiative has gained crucial backing from UK Chancellor of the Exchequer, Rachel Reeves, who sees this as a key step towards boosting the UK economy.

• The government's role is not just symbolic; they have the power to convene and motivate major players in the financial sector to commit to this initiative.
• The British Business Bank, a government-backed institution dedicated to improving business financing, will be a vital stakeholder.

Private Sector Purse Strings: A Commitment to Change

The success of this initiative rests on the willingness of private sector institutions, particularly pension funds, to invest in female entrepreneurs. The Mansion House Agreement has already seen a commitment of £320 billion over five years to support early-stage businesses.

• The Invest in Women Taskforce aims to secure a significant portion of this funding, particularly for female-led businesses.
• The business case is strong, with research indicating that female-led businesses often generate better returns on investment.

Addressing the Barriers: The Need for More Female Investors

A major obstacle faced by female entrepreneurs is the lack of female representation in venture capital and angel investor circles.

• Women are more likely to invest in other women, understanding their businesses and the challenges they face.
• The lack of female investors is a major barrier, as women entrepreneurs often solve problems that resonate deeply with other women, but men may not fully grasp the opportunity.

Unlocking Potential: The Power of Female-Led Investment

The Invest in Women Taskforce plans to address this by allocating funding to female general partners, with a mandate to invest in women-led and mixed teams.

• This will increase the presence of women in decision-making roles within the investment community.
• It's expected to attract top talent and inward investment to the UK, creating a more equitable and thriving entrepreneurial ecosystem.