Male-owned businesses get seven times more funding than those owned by women

Businesses with male founders or co-founders receive nearly seven times more funding on average than female owned businesses, despite women-led businesses starting to outperform mens, Startups.co.uk can exclusively reveal.

We collected data from over 200 small businesses as part of our 2021 Startups 100 index, an annual ranking of the 100 most disruptive UK small companies.

Our results show that, on average, a female-founded business receives £644,000 in total funding, compared to a staggering £4.34 million for a solely male-owned organisation.

The importance of a right-hand man

Almost exactly one month after International Women’s Day, our findings paint a depressing picture of sexism within the UK’s venture capital community.

But the disparity is even more shocking when compared to businesses with both male and female founders.

The Startups data found that the average amount of funding received is £4.2m – almost the same average amount raised by a solely male-founded company.

This suggests that, while progress has been made towards gender diversity in business, a male founder is still required for female entrepreneurs to secure significant early-stage investment.

Independent women

As well as looking at the amount of funding received based on gender, Startups also investigated the percentage of businesses that were started without any external investment.

We discovered that over half of female founded businesses are bootstrapped – or self-funded – compared to just 26% of male organisations.

This is likely a consequence of the gender funding gap, with women more likely to encounter obstacles to obtaining capital.

Bootstrapping is a common entry route for new businesses. However, there are a lot of disadvantages to self-financing.

Not receiving upfront money from venture capitalists may give you more business control, but it can quickly cause cash flow issues if your sales numbers don’t meet expectations.

Many startup owners who are bootstrapping also forgo a salary in the beginning months.

Female entrepreneurs having to bankroll their business themselves not only brings personal financial risk, but also increases the chance of startup failure.

If you are a female entrepreneur looking to start a new business venture, it would be easy to feel put off by our research. But don’t worry – the team at Startups is here to help.

We are the UK’s number one independent small business online resource. You can read any of our thousands of guides for information on everything from the best business grants for women, how to write a business plan, and even inspirational entrepreneur success stories.