Debbie Wosskow says the aim of the Invest in Women taskforce is to create the biggest funding pot in … [+]
U.K. Finance Minister Rachel Reeves has endorsed a new initiative aimed at directing more investment toward female-led founder teams. Central to the plan is the establishment of a £250 million “fund of funds.”
The Invest in Women Taskforce was launched in March this year by entrepreneur Debbie Wosskow and Barclays Bank executive Hannah Bernard. The intention was to create a better funding environment for female entrepreneurs by bringing a new pot of capital onstream while also encouraging more women to become investors.
As Wosskow explains, the initiative has secured the backing of Chancellor of the Exchequer , Rachel Reeves at a time when women are finding it more difficult than ever to raise funds.
“The statistics around female entrepreneurs raising funding in the U.K. are very bad,” she says. “Data from the first half of 2024 shows the amount of capital going to back all-male founder teams has gone up from 80% in the first half of 2023 to 86%. The amount of capital going to back businesses founded by women has gone down from 2.0% to 1.8%.
So, how can that situation be improved? “We want to create the largest funding pot in the world backing female-powered businesses,” says Wosskow. “We are focused on shifting capital allocation by supporting female investors.”
The money to create the £250 million fund will come largely from private sector sources such as banks and pension funds acting as LPs. This will be made available to GPs in individual funds with the proviso they back female-led businesses.
The Invest in Women Taskforce is now styling itself as an industry-led, government-backed initiative. “The endorsement by Rachel Reeves is a turning point for us,” says Wosskow. “She is Britain’s first female chancellor and there is a recognition on her part that backing women could boost the U.K, economy by £250 million.”
And as Wosskow sees it, government backing is more than symbolic. “We need to rally the retail banks and the pension funds to commit capital to female entrepreneurs as LPs,” she says. “Politicians absolutely have convening power and they have the power of momentum.”
In addition, she says the British Business Bank will be a key stakeholder in the initiative. Although its programs utilize private sector money, it was created by the government to improve the flow of funds to businesses. There is also a bigger policy picture. Wosskow says the goals of the Invest in Women Taskforce align with some of the government’s policy objectives. These include growing the economy and encouraging diversity.
However, it’s the private sector institutions that will hold the purse strings. Pension funds in particular have already committed themselves – under the Mansion House Agreement – to allocate more funds to startup companies. That’s a work in progress, so will they also commit to a program specifically designed to support female entrepreneurs? Wosskow believes they will.
“The Mansion House compact involved a £320 billion commitment over five years to back early-stage businesses,” says Wosskow. “We are talking about an initial pot of £250 million. That is an insignificant proportion of the overall sum that will be allocated. So it’s not a big ask.”
Wosskow says there will be an announcement in a few weeks and she is confident the £250 million target will be met. That’s partly, she says, because there’s a good business case. Wosskow cites figures showing that female-led businesses deliver a better return than those managed by male founders.”
All of which leads us to the barriers that women face when fundraising. There are relatively few women in senior roles at VC funds and only around 14% of angels are female. Put simply, there aren’t enough female investors. That matters because women are more likely to invest in women.
That’s not simply a product of conscious or unconscious bias. Many female entrepreneurs create businesses that solve problems for other women. Sometimes men simply don’t understand the problem and, consequently, the opportunity.
So, raising funds for a female-led business can be a battle, particularly in the early days. Emma Jarvis is founder of Dearbump, a subscription box service providing products on a monthly basis through the course of pregnancy. This week saw the launch of the Dearbump app, billed as a “digital midwife” and designed to offer ongoing health advice and support through pregnancy and beyond. She agrees there is a need for more women in investing roles.
Jarvis raised angel and crowdfunding (SEEDRs) finance three years ago.”I did everything I could possibly do to get the advice I needed but it was harder than I thought it would be,” she says. “The problem I am trying to solve affects women. Because 80% of investors are men, they think that’s a woman’s problem and it’s niche or they don’t fully understand it.” In the end, most of Dearbump’s investors are men, Jarvis said finding them was a harder process than it should have been.
“The quickest way to solve that problem is to have more funds run by women,” says Wosskow. Thus, capital from the £250 million fund will be allocated to female general partners, with a mandate to deploy the capital into women-led and mixed teams. “That matters because even mixed teams aren’t getting funding,” she adds.
Wosskow says the taskforce will help to attract people and inward investment to the U.K. “If there is a significant pot of money we will get great talent. We can ensure we’ll get the highest quality entrepreneurs and investors coming to the U.K.”
Will the initiative achieve it’s objectives? That will depend on the willingness of instutiional finance companies to come on board.
