Last week, we published a blog exploring the vast opportunity that lay in welcoming women into the business world – including better results, varied perspective and added value to the economy. However, despite this, women still experience barriers to getting traction in business, such as securing the funding they need to launch their entrepreneurial visions.
Giving women better access to funding is key to promoting female entrepreneurship and increasing equality within business. This means providing them with the appropriate financial support to secure investment, pursue success and overcome obstacles comfortably.
Virgin StartUp has previously asked female founders what support they want to see for upcoming entrepreneurs and recurring themes including networking, mentoring, loans, emotional support and so on. In this blog, we have explored some of the specific financial support that could assist female entrepreneurs in their journeys – to the benefit of both entrepreneurs themselves and the broader economy.
Networking opportunities
In Virgin’s focus on the support female founders would like to see, one of the most prominent emphasises was networking. Given that professionals who spend time networking agree that it plays a crucial role in their success, it is no surprise that female founders see this as a critical part of establishing an enterprise.
While networking isn’t necessarily seen as ‘financial’, the reality is that it’s a way to connect with different people who may be useful for your business, including mentors, partners and, crucially, potential investors and lenders. You may even meet people who can point you towards a relevant avenue for funding, such as loan or grant schemes.
However, networking can be intimidating, particularly if you’re new to the practice. Many female business leaders also report experiences of being the minority in a room full of men at networking events, which could act as a deterrent for women. However, due to the role networking plays in linking entrepreneurs and funders, opportunities must be presented that allow female founders to connect with others comfortably.
These opportunities could come in many forms. Women-specific events are one way to open up communication between different female entrepreneurs and business leaders, which might make them feel more welcome and allow them to liaise with similar-minded people. Many networks already exist for this purpose. Mentoring schemes may also work by directly partnering established female founders with up-and-coming businesses to offer practical advice and support.
However, the most valuable thing businesses can do to introduce more women to networking is to create an inclusive environment. This means ensuring women are invited to events you hold, hosting female experts on panels, or even just connecting people you know with women-led businesses when it is relevant.
By having inclusive networks, female entrepreneurs will be much better placed to make connections with lenders or individuals who can help them to obtain the funding they need for their business.
Start-up funding
Getting start-up funding is one of the hardest parts of launching an enterprise – particularly for women, who statistically raise less when seeking start-up capital. However, securing financing is essential for a company to get started on solid foundations and begin trading – and so, female entrepreneurs need to get the money they need as readily as their male counterparts might.
With the aim of bridging the gender gap in start-up funding, there are now many start-up schemes dedicated to providing women with the capital they need to launch their businesses. These schemes stem from various sources, including angel investment networks and platforms, business competitions and other lending programmes.
Female applicants are also increasingly encouraged from more traditional avenues, such as high street banks (examples including Barclay’s Rise initiative and RBS’s Female Entrepreneurship Funding scheme) and venture capital. In 2012, the UK government launched the Start-Up Loans Company, which has provided more than £175 million to female owners to date.
The programmes already exist provide an excellent stepping-stone for equal start-up opportunity, offering women-specific sources to approach in their search for capital. However, the increased diversification of start-up funding is needed to allow more female founders to get the equity they need and encourage more entrepreneurs to step forward. This means more lenders offering their loans to female founders and more investors choose to place their money into female-led ventures.
Increased access to finance
Of course, it is not just at the start-up stage that businesses require financial support. In an enterprise’s lifespan, there are likely to be many points that funding is needed – such as to boost cash flow, enable expansion or overcome financial challenges.
With women getting 157 times less business funding than men, achieving the capital they need at each of these points becomes increasingly less likely. While there are many women-specific programmes aimed at the start-up stage, this becomes less prominent beyond the early stages. So, it is essential that female owners can secure funding when they need it in the same way that male owners can.
Access to finance remains the most significant barrier for women, not just in starting a business, but also in scaling up their existing companies, with one third citing this as an obstacle. To ease the burden, lenders of all types must provide similar support levels to women-led businesses as men-led ones.
This comes in two parts: firstly, women must be given the opportunity to understand the role finance may play in their business over time through mentoring, guidance and access to financial advice. Secondly, more lenders need to process and accept more female-led applications. This will likely be improved as more women take to investor or lending roles, allowing varied perspectives and increased diversity throughout the industry.
By making this access to finance available to female entrepreneurs at every stage of their business lifespan, women-led ventures are more likely to succeed – boosting both the economy and the entrepreneurs themselves.
Alliance over time
When we think of business icons, names like Bill Gates, Steve Jobs and Richard Branson. It is only in more recent years that a spotlight has been increasingly shone on successful female founders. The same must be done in the way we interact with female-led businesses.
There are several ways to ally with female businesses, ranging from introducing them into networks (the importance of which we have already discussed), creating partnerships or even sharing them on social media. Doing so can increase revenue and profit and help these companies to flourish financially.
By working with women-led businesses in the long-term, they can be given better visibility and access to new opportunities. This will allow them to achieve better results and showcase female leaders in a male-dominated industry, which could encourage other women to follow their entrepreneurial dreams.
Get funding advice
As with every business, support plays a vital role in female-led enterprises. Historically, this support has been scarce for women, but data shows that the tide is beginning to turn. The biggest obstacle to overcome is access to finance, which often acts as the decider to whether a business will succeed or fail. By allowing women into the right networks, giving them equal guidance and opening opportunity, funding barriers will get smaller.
If you are a female entrepreneur seeking funding, we are committed to helping you. At Pegasus Funding, we have access to a vast network of contacts and knowledge of relevant schemes that could provide you with the capital you need for your company’s establishment and continued operation.