industryopinion Female founded
businesses still overlooked in UK tech scene
Claire Trachet, Founder and CEO of female-led advisory firm, Trachet discusses the social models that continue to prevent female entrepreneurs from acquiring funding and how to combat this issue.
A
s London Tech Week got into full swing and industry titans came together, issues of diversity and inclusion in tech were top of the agenda. However, as UK firms
struggle to recruit for tech roles with a staggering 150,000 vacancies in the sector, Trachet - a female- led advisory helping entrepreneurs accelerate growth – highlights the fact that women are still sorely absent in the UK startup tech arena. Research shows women make up only 19% of the general talent pool and 23% at senior level compared to 49% and 29% respectively in the wider economy. In light of this, Trachet commissioned
“Research shows
women make up only 19% of the general
landmark national research to understand what barriers are hampering gender equality in the UK business ecosystem. The data found that nearly 1-in-5 British women state that due to a lack of diversity in the higher ranks of their business they never saw a future in it, so they left that sector. A further 52% of Brits state they share the sentiment that women must work twice as hard or be twice as qualified as men to reach the same objectives in business - an issue which is further exacerbated when it comes to female founded companies. Perhaps unsurprisingly, this need to work harder is having a knock-on effect on their mental health, with 36% stating they often feel tired, helpless, or lonely from the world of work due to their workload. Furthermore, the Rose Review progress report - which sets out
the full extent of progress made into gender equality in business - announced that the UK economy finds its growth hampered by nearly £250bn due to a lack of investment and support into female-founded businesses. Echoing this sentiment, Trachet’s research outlines that 28% of women in Britain believe large- scale investors won’t even consider them as a viable investment opportunity. Women lead 40% of all micro businesses and 38% of small
businesses yet only 26% of women lead medium sized businesses, with the percentages getting gradually lower as the businesses get bigger. This is seemingly due to the barriers women encounter when seeking finance to scale-up their firms. Women start
12 | September 2022
respectively in the wider economy.”
talent pool and 23% at senior level compared to 49% and 29%
their businesses on average with 53% less capital than men, a report by Deloitte states that 46% of would-be borrowers did not seek finance because they expected issues with the loan process. Female-founded businesses only secured 1.4% of VC funding in 2021, compared to 24% of crowdfunding deals, and 20% of angel investments. In the UK only 7 in 137 of the fastest-growing tech companies have female founders or co-founders. Social models are still significantly
biased against women and minorities. This is reflected in business by lower salaries, a
slower career path, distinct lack of access to C-suite or board positions and both fewer and smaller investments received. There is no chance of reaching a more balanced set of opportunities for women and men without society making conscious choices to start with – just like getting into any new habit.
Crucially, it is important to note that this is not advocating
for the promotion of subpar businesses because they are led by women. It is about giving people a fair shot and owning the fact that biases run deep within businesses and institutions all around the world, including tech. Female entrepreneurs bring a different perspective that
opens fresh solutions to age-old problems. One such example is CodeOp, a female-founded company that built a business, which demonstrates every day that, when it comes to diversity in tech, the “pipeline problem” is a myth that prevents accountability for biases in the organisations. Accountability and actions are a path to that balancing of opportunities. Women-led businesses regularly outperform other businesses,
meaning excess returns for the investors, and they tend to reach these top echelons of performance in a more capital-efficient way. On top of this, their businesses tend to be less volatile during crises - something we have seen countless times in the businesses we advise. Female entrepreneurs also tend to build businesses that are more diverse, hence the added creativity in problem- solving, but also increased capacity to attract and retain talent in this era of the “great resignation.
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