Recently the United Kingdom’s Department for Business and Trade published its annual Investing in Women Code report. It finds that venture capital fund managers who have signed up to the Code are more likely to invest in female founders.
Roughly one in three (32%) of all venture capital deals made by Investing in Women Code signatories were in female-founded companies last year, compared to the market average of 28%. This is the fourth year in a row that Investing in Women Code signatories have outperformed the wider market.
Investing in Women Code signatories who consistently report data year-on-year perform better in deals to teams with all-female founders than those who do not. However, there is still a long way to go, with the average amount of angel investment in all-female teams 50% lower than the amount invested in mixed-gender teams and all-male teams.
The Investing in Women Code was founded in 2019 as a government-led initiative in response to the Rose Review’s findings that a lack of funding was one of the most significant barriers to women seeking to effectively scale a business. Investing in Women Code Partners include the British Business Bank, British Private Equity & Venture Capital Association (BVCA), UK Business Angels Association (UKBAA), UK Finance, and Responsible Finance. Code Partners are responsible for managing data collection and reporting on behalf of the government.
More than 250 organizations have now signed up to the Investing in Women Code, showing the growing numbers of lenders and investors committed to increasing the levels of finance directed towards women-led businesses. The organization believes that access to finance will boost the potential of female-founded businesses and help grow the economy.
Other key findings from the Investing in Women Code’s fourth annual report show that:
- The market share of signatories’ deals continues to rise for the third year in a row as the number of signatories increases.
- The 30 new venture capital signatories reporting for the first time in 2023 invest a higher share of deals to teams with at least one female founder compared to all signatories and the wider market, with 42% of deals going to teams with at least one female founder compared to 28% in the wider market.
- 32% of all venture capital deals made by Investing in Women Code signatories were in female-founded companies last year.
- There has been a rise in the number of pitch decks and funding requested from angel groups from all-female teams.
- Warm introductions continue to be the most successful in securing funding for all teams.
- Angel groups with more than 15% women investors made 57% of their investments in teams with women founders.
- Diversity within signatories’ investment committees improves outcomes for teams with at least one female founder.
- There is an increasing number of female angel investors in the United Kingdom, with three angel signatories consisting entirely of women angel investors, triple the number of last year’s cohort.
The report finds a significant gender gap still exists. For example, today’s market strains have the most impact on all-female founding teams. The Investing in Women Code believes increased engagement with signatories will provide support to those who are still at the beginning of their journey and recognize those who already lead the way. In partnership with the Invest in Women Taskforce, the representatives of Investing in Women Code said they will work unitedly towards its mission to ensure talented and ambitious women entrepreneurs can access the finance they need to thrive.
“With an increasing number of our Angel groups signing up to the Code, including a growing number of groups with a strong proportion of women angels, we can see the impact on women founders seeking and finding angel investment across the UK,” UK Business Angels Association executive chair Jenny Tooth OBE said. “Signatories are attracting an increased level of women founders into their pipeline, whilst, for the first time, deals in women founders have surpassed the number of deals in male founders accessing investment, achieving over half the deals and share of investment from the Angel group signatories.”
