The question of why, in the start-up capital of Europe, female entrepreneurs have so much difficulty getting access to funding to start and scale their businesses is the subject of Government reports and ongoing debate. The Government-commissioned Alison Rose Review of Female Entrepreneurship (March 2019) found that while UK companies attracted more venture capital than those in any other European nation, just 1% went to all-female founding teams.
It is a complex problem that affects the whole of the UK economy, not just those women seeking to grow their enterprises. Rose points out that up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as men. So why does the disparity exist and how can female entrepreneurs go about levelling the playing field and attracting the investment they need?
According to businesswomen who have successfully scaled and sold companies, women often face (mostly) unconscious sexism from largely male investment teams. Only 13% of senior people on UK funding teams are women, according to Rose. Sue Nelson, who founded niche SME tax firm Breakthrough Funding five years ago and sold it to EY in March, says these investors often fail to recognise the value of opportunities being presented by female founders.
Focus on finance
She explains that while men are often very confident in a pitch and paint an extravagant picture of the opportunity, women are sometimes less comfortable in a pitch environment and that can make their presentations less compelling. Female entrepreneurs , therefore, not only need to have all the figures at their fingertips and know exactly what they want from the investor, but they may also need to work hard to develop a more confident presenting style. This could mean seeking out the support of a business advisor or mentor.
There are many ways to get over your nerves before a pitch – Sue gets “pumped up” by listening to The Prodigy loudly in the car on the way there – but practicing your presentation ahead of the meeting is critical. “And when you get there you have to take up all the visual cues of what that person or that panel is looking for,” she explains. “Are they very formal? Are they quite informal? Are they chatty? Are they in listening mode? And then you need to go with it. Don’t be rigid about presenting. You know it all, you’ve practiced it and practiced it and when you get there it’s time to relax and do whatever it is that you think they want at that time.”
She adds that it’s essential for women to focus on the finance and not to overly emphasise the other important topics such as social purpose and community benefit. “Investors primarily want to make money,” she says.. If they are investing £100,000, they want to know when they are going to get their £100,000 back and when they are going to get more than the £100,000, they put in. They want to know whether they will double their money in five years or in two years, and they want a compelling story that convinces them that will happen.”
Emmie Faust, an entrepreneur turned business growth consultant with our herd, won £200,000 in funding on the TV show Dragon’s Den at the age of 25 with a male business partner. Although that venture was unsuccessful, she has since sold two businesses for seven figure sums and has never had difficulty attracting funding.
She says: “What I say to my clients is that in order to secure funding, you need to start networking. I’m part of loads of female networks but it doesn’t have to be just female networks, you just need to start networking and you need to start getting out there. That’s one thing that I believe is massive. You’ve got to be incredibly proactive. It’s very hard to get funding, it doesn’t just land in your lap.”
As a mother-of-four Emmie says that another issue holding businesswomen back is that they often take on the lion’s share of responsibilities in the home and take time out to have children. She says that when she had each of her children, she returned to work lacking in confidence and it took time to build that up again.
Sue and Emmie now mentor female entrepreneurs and help them to win funding. Sue explains: “I think I have spent quite a lot of my career with men not listening to me and talking over me or across me. What I do now is help women get into business, make sure they are getting into it for the right reasons and that they know what they are doing. I think as a successful female founder it’s your job, as they say in America, to send that elevator down and try and help other women.”
Sue and Emmie were both speakers at a recent WealthiHer Network event, alongside St. James’s Place, in which they discussed the topic of presentations for funders and clients.