In case you’ve not been reading the news (and I certainly wouldn’t blame you for avoiding it), on Monday we released Resilience and Recovery – the latest report from the Female Founders Forum, which we run in partnership with Barclays. It got a lot of coverage, including in The Telegraph, FT Sifted, City AM, The Scotsman, Evening Standard, and loads of other places.
Drawing on Beauhurst data, we find that equity-backed businesses have been disproportionately impacted by the COVID-19 pandemic. But it’s not all doom and gloom – female founders are fighting back, with more than 60% of female-founded, equity-backed businesses now operating with minimal disruption to their business.
The report’s author Aria Babu identifies four trends which explain the discrepancy.
First, women have often had to take on greater childcare or unpaid work burdens during lockdown. While clearly not all female founders are impacted by this to the same extent, one thing that surprised me is that even women who significantly outearn their male partners tend to do more of the household chores, which presumably includes a lot of successful entrepreneurs in lockdown. (For further reading, check out the Women in Leadership report Annabel Denham wrote for the APPG for Entrepreneurship to see how we can even things up – particularly around childcare.)
Second, women are more likely to start businesses in sectors which have been worse affected by the pandemic, such as retail, hospitality, and leisure. Also, female-founded businesses are less likely to be tech or IP-based businesses (28% and 33% for all equity-funded startups), which have been most likely to find opportunities for growth at this time.
Third, in the lead-up to the pandemic the equity funding gap has persisted. According to Beauhurst data, in the past 18 months, the average raise for startups with at least one female founder was less than half of the average raise for startups with all-male founders. In 2020, just 13% of total equity investment went to female-founded startups and when it did, it tended to be for smaller amounts. (For further reading, take a look at Untapped Unicorns, our first Female Founders Forum report, which was one of the first times the UK’s equity funding gap was revealed.)
Finally, women are less likely to seek external finance, though once they received an initial investment, female-founded startups were just as likely to raise additional rounds of funding compared to non-female-founded firms. (For further reading, check out last year’s Here and Now report.)
Resilience and Recovery has 15 recommendations, covering everything from the Department of International Trade publishing statistics about the gender breakdown of SME exporters; the government incorporating elements of crisis planning into the application process new business support schemes; and equalising Statutory Shared Parental Pay with Statutory Maternity Pay.
Barclays has pledged to support 100,000 female-led businesses off the back of the report. And while there’s no silver bullet, there’s a pot of gold at the end of the rainbow. As Juliet Rogan, Head of High Growth and Entrepreneurs at Barclays, says: “Creating an environment where women start and scale businesses at the same rate as men could add nearly £250bn to the UK economy.”
You can read the report or a pithy two-page summary here, and give this Twitter thread a retweet or share elsewhere to show support.
Enterprise Allowance 2.0
As reported by the always excellent James Hurley in The Times, former chancellor Sajid Javid has backed a plan to give the unemployed £100 every week for 12 months to help them to get start-ups off the ground.
It’s a new version of the “enterprise allowance”, which began in the unemployment crisis in the 1980s. The proposed scheme would be available to anyone not presently employed, with a viable business idea and access to £2,000 in start-up capital. Any income earned from the start-up would not affect what the founder might receive via universal credit benefits.
As Hurley reports, the original enterprise allowance funded more than 325,000 individuals, including Julian Dunkerton, the Superdry founder, Alan McGee, the Creation Records entrepreneur, and Simon and Chris Donald, founders of Viz magazine.
Chris Hulatt of Octopus came out with a similar idea recently. Springboard would be a £1 billion Springboard Fund, which would provide a grant of up to £10,000 per individual to help create up to 100,000 businesses and fight the economic damage wrought by coronavirus. One thing I liked about Hulatt’s plan is that it would be combined with mentoring, which I think would be vital for avoiding unnecessary business failure.
Tech (Nation) for good
From its days as Tech City to try to support the rise of the tech cluster in Shoreditch, to its expansion with its Tech North outpost, right through to its national expansion into Tech Nation, it’s an organisation that hasn’t been without its critics – particularly in the media. However, naysayers should take note of an independent impact evaluation from the Department for Digital, Culture, Media and Sport, which suggests that the largely government-backed organisation is making a sizeable difference.
Using a number of different measures, it concludes that Tech Nation’s key initiatives are delivering substantial benefits, identifying a substantial gross value added (GVA) impact 1 to 2 years after participating in Future 50, Upscale, and Northern/Rising Stars.
Evaluations of this sort aren’t always so glowing – just take a look at the one on the Catapult Network from 2017 – so credit should be given where it is due. While this isn’t the last word – one of the recommendations is Tech Nation to collect more and better data – we should celebrate when we have evidence of public money being put to good use.
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