Lloyds Banking Group

Diversity in Business Parliamentary Briefing Paper

A report on the climate for women entrepreneurs and founders, for a round table in the House of Commons supported by Lloyds Banking Group

Women entrepreneurs: the big picture

The UK is ranked the fourth top country in the world for entrepreneurship[i] and small to medium size enterprises support more than 16 million jobs nationwide.[ii]

There are now 1.2 million women-led SMEs in the UK, contributing around £75 billion to the country’s economic output.[iii] However, only one in five small- to medium-sized businesses are run by women[iv] and women are half as likely to start a business as men.[v] A recent British Business Bank report, commissioned by Chancellor Philip Hammond, found that for every £1 of venture capital investment in the UK, less than 1p goes to all-female founder teams. This means that 83% of deals made by UK venture capitals have no women on the founding teams, adding up to an estimated £5 billion of investment going to all male-founded start-ups.[vi]

This sits within a bigger business picture in which women make up only 27% of full-time chief executives and senior officers[vii] – there are currently more people called David or Steve directing FTSE 100 companies than women or people from ethnic minority backgrounds[viii].

Why does this need to change?

The moral argument for equality of opportunities, regardless of gender, speaks for itself.

But the economic imperative for investing in women’s enterprises is becoming increasingly clearer.

A study on millennial entrepreneurs by BNP Paribas suggests that female entrepreneurs provide better profit margins than their male counterparts[ix] and research from the Women’s Business Council suggests that the UK could gain over 1.2 million new enterprises by investing in their untapped business potential.[x]

This is echoed by Women and Equalities Minister Penny Mordaunt, who says that with the right support, female-founded enterprises could add £95 billion to the UK economy by 2025.[xi]

It’s worth noting that 70-80% of consumer shopping worldwide is controlled by women[xii], but the products they are buying are largely developed by men.

Allowing everybody to make their fair contribution to the life of the country, while ensuring that innovation corresponds to consumers, will clearly help the economy thrive.

What are the barriers to the success of women-led startups?

Unconscious bias

Unconscious bias is inadvertent social stereotyping about groups of people outside of an individual’s own conscious awareness. Everyone holds unconscious beliefs and they are often incompatible with our conscious values.

  • An in-depth global survey by Unilever Foundry[xiii] revealed that 39% of female founders questioned frequently encounter sexism while running their startup and 42% believe that they will continue to experience gender discrimination as they scale up.
  • 83% of female entrepreneurs questioned experience marginalisation in meetings, while 80% have received negative treatment when bringing up issues of gender equality.
  • 82% agree that they’ve let inappropriate comments slide to avoid looking uptight.
  • In comparison, only 1% of men think that their gender has hindered their success.[xiv]

Access to funding

  • A study by the Female Founders Forum reported that male entrepreneurs are 86% more likely to be VC funded and 56% more likely to secure angel investment than their female counterparts.[xv]
  • A comprehensive study of 160 venture capital firms by the non-profit Diversity VC found that women make up just 27% of the UK’s venture capital workforce – so men disproportionately decide where venture capital is invested.[xvi]
  • Research by Harvard Kennedy School suggests that investors prefer pitches by men over women, even when the content is exactly the same.[xvii]
  • Added to this is the importance of networking to success. Research by the British Business Bank finds that ‘warm introductions’ (that is, when startup founders are recommended by someone in the VC’s network) make startups 13 times more likely to receive funding than those who apply without a recommendation. All-female teams are far less likely to receive a warm introduction to a VC firm.[xviii]
  • According to research by the Federation of Small Businesses (FSB), access to traditional means of funding is the biggest barrier to the success of businesses run by women[xix] – which is echoed by the Unilever Foundry’s report: 42% of female founders cited funding as one of the most challenging barriers to starting up.
  • A Telegraph poll last year found that 72% of female startup founders use their own savings and credit cards to launch their businesses, due to a lack of access to traditional types of funding.[xx]
  • 24% of startup founders interviewed by the Unilever Foundry reported that investors are less willing to invest in women. In fact, the report found gender bias to be the biggest discrimination factor, over ethnicity and age.

Role models and the STEM issue

According to the Unilever Foundry, 61% of women entrepreneurs think there aren’t enough female role models in the startup industry.

Aside from the difficulties that women entrepreneurs face in securing funding to scale up, there are fewer women working in tech in the first place – and of the UK’s top 100 tech companies, 44 classify themselves as technology-based, which is more than the next four largest categories combined.[xxi]

Yet currently, women make up just 22% of people working in science, technology, engineering and mathematics in the UK.[xxii]

Insider perspective

“It’s mostly about social norms and the conditioning that we give girls from a young age. What it is to be a young woman and what they’re capable of. Everyone you learn about in these subjects is dead, white and male. We need to tell the ‘herstory’ of it all and talk about the women that have been.” – Dr Anne-Marie Imafidon (MBE), winner of a Barclays’ Women of the Year award in 2018 and founder of social enterprise Stemettes

Maternity discrimination

A cultural expectation for working women to ‘do it all’ prevails. As one interviewee from the Unilever Foundry report put it, “You have to be like wonder woman – wake up at 5am to do boxing for two hours, work all day, have five kids, be juggling a number of networking events at the same time.”

In terms of legislation, female entrepreneurs receiving Maternity Allowance (MA) – the statutory pay for women not working for an employer – are penalised if they work for more than 10 days during their 39-week Maternity Pay Period (MPP).[xxiii] This means that as a business owner, the option to keep the business afloat while juggling with the first few weeks of motherhood, while enjoying financial stability, can be taken away.

What’s the government doing?

  • In September 2018, Alison Rose (Deputy CEO of NatWest Holdings – RBS) was appointed to lead a government review into the barriers faced by women starting businesses. Due to be published in the spring, the review will analyse the extent to which female-led firms receive less financial backing than their male counterparts and will consider best practice for investors looking to avoid gender bias in their decision making.
  • The government-backed Women in Innovation campaign by Innovate UK increased the number of women engaging with the organisation from 14% in 2016 to 24% last year and led to a 70% increase in registration for funding from female applicants[xxiv] – the organisation’s most successful ever communications campaign. Innovate UK also gave out eight Women in Innovation Awards in 2018, with the winners receiving a £50,000 grant and support package.
  • The UK government has also set a goal to increase the number of women working in STEM to 30%, which could boost the UK’s overall labour value by more than £2 billion.[xxv]
  • The Welsh government has instigated a Supporting Entrepreneurial Women programme, which includes a Good Practice Guide and framework for businesses recommending specific ways to improve the business community for women entrepreneurs. These include providing gender-focused business support, increasing the number of business advisor and mentors, and promoting career successes of prominent female entrepreneurs.[xxvi]

What are businesses doing?

  • Hatch Enterprise and JP Morgan run the Female Founders accelerator – a selective, four-month programme to help women-led businesses scale up.[xxvii]
  • The Federation of Small Businesses (FSB) aims to increase the number of women accessing alternative finance for their startups with its new FCA-regulated funding platform, which provides access to over 120 lenders.[xxviii]
  • Gender diversity specialists at Jeneo connect event organisers with women panelists to boost diversity at tech events.[xxix]
  • Social enterprise Code First: Girls, runs free coding classes for girls and has set a goal to teach 20,000 women to code by 2020.[xxx]
  • Fintech Unicorn Revolut has pledged to teach free coding evening classes to women in Canary Wharf in a bid to level out the playing field for women entrepreneurs in tech.[xxxi]

Mentoring and sponsorship

Research indicates that entrepreneurs with a mentor are more likely to succeed: for example, 96% of women involved in the Cherie Blair Foundation’s Mentoring Programme for women in business report having benefitted from the programme in terms of building confidence and sustaining their business.[xxxii]

  • Lloyds Banking Group runs an award-winning women’s network called Breakthrough, which with 15,000 members and 4,000 mentors is the largest of its kind in the UK.[xxxiii]
  • Barclays and The Entrepreneurs Network set up the Female Founders Forum, which encourages, supports and promotes female entrepreneurships via speed mentoring events and research.[xxxiv]
  • The School for Social Entrepreneurs (SSE), which run courses that equip 1,000 entrepreneurs each year to start, scale and strengthen socially minded organisations, runs the fully funded Lloyds Bank Social Entrepreneurs Start Up Programme. It provides a grant, ready-made network and one-to-one mentoring scheme to successful applicants (2019-20 applications are currently open).[xxxv]

While female role models are imperative, there’s an argument in favour of male sponsors for women in business. Forbes highlights an issue in expecting the fewer number of women business leaders, who may already be juggling more than their male counterparts, to take on mentorship responsibilities, too – and research cited by the Harvard Business Review points to a gap between mentorship and actual career advancement, which could be breached by proactive sponsorship.[xxxvi]

Inspiring the next generation

  • The Careers and Enterprise Company has funded over 170,000 encounters between college students and STEM employers over the past three years.[xxxvii]
  • Social enterprise Stemettes has reached almost 40,000 young women via its free STEM events for young women, with 95% of attendees agreeing that their interest in STEM subjects increased thanks to the experience.[xxxviii]
  • The Women of the Future Ambassador’s Programme (in partnership with Lloyd’s Banking Group) connects award-winning business women with female sixth-form students to act as their mentors.[xxxix]

What more can be done?

The first step is recognition of and frank communication about issues of gender diversity – and this starts at the top.

At government level

The APPG for Entrepreneurship stresses a need to address issues of maternity pay and childcare costs to women entrepreneurs, as well as improved data collection on business ownership.[xl]

Deloittes calls for the implementation of a Women’s Enterprise Academy as part of its proposal for a new female-led startup ecosystem.[xli]

Insider perspective

“Government support in funding returners’ programmes and other initiatives that support women retraining will encourage women to get back into tech and hopefully that will lead to more female-run startups. Interestingly, an unintended consequence of Gender Pay Reporting may actually be to encourage more women to leave the uneven playing field afforded by the corporate world and start their own businesses.” – Jacqueline de Rojas, president of techUK and employment diversity specialist

At investment level

One of the most effective ways to overcome the barriers that get in the way of women entrepreneurs from receiving funding, could be to appoint more female partners in venture capital and investment firms.

According to the UK Business Angels Association, angel investors are making more investments than ever before in Britain, one in seven of which are now women – a figure that’s doubled over the past 10 years.[xlii] As this trend continues, increased investment in female-led startups should correlate.

The Female Founders Forum suggests that women in business ‘pay it forward’ as much as possible by appointing and investing in fellow female entrepreneurs.[xliii]

Insider perspective

“Responsibility here lies with industry, not government. Many companies now require a diverse shortlist of talented individuals when interviewing for a job. We should be doing the same for investment. We need to shine a light on female entrepreneurs in the UK and ensure they are visible to business leaders. We can all play our part here through social media here; make sure you’re retweeting and sharing posts that shine a spotlight on the great work of female entrepreneurs. #AcknowledgementMatters” – Jacqueline de Rojas

What’s next?

In government

  • The Minister for Women and Equalities Penny Mordaunt announced in November 2018 that the Government Equalities Office will move to Cabinet Office on 1 April 2019.[xliv]
  • The government also launched a partnership between the Government Equalities Office (GEO) and the Behavioural Insights Team to collect more evidence data on the gender pay gap and come up with new solutions for closing it.[xlv]
  • The second Women in Finance Charter Annual Review will be published by the HM Treasury in March this year, providing an update on the 2016 charter that committed firms to supporting the progression of women into senior roles. Economic Secretary to the Treasury, John Glen, spoke of using the findings to inform government action, while making the business case for diversity and inclusion at the PIMFA Wealth of Diversity Conference 2019.[xlvi]

In business

Events to look out for in 2019:

  • Women’s Enterprise Day 2019: Turning passion into purpose (8 March, London) – a panel of leading businesswomen discuss the trials and joys of running a business and share tips on what they wish they’d known starting out.[xlvii]
  • Women in Tech Leadership conference (29-30 March, London) – held by the Inclusive Tech Alliance, a diversity in tech initiative launched in the House of Commons November 2018, and attended by the senior leaders of 4,000 leading tech companies.[xlviii]
  • WIN conference (June, Manchester) – attendees are provided with practical tools and contacts to help them initiate inclusive work cultures.[xlix]

Considerations and criticisms

There’s more work than ever before being done to level out the playing field for women entrepreneurs, in terms of both governmental and industry initiatives. But there are still barriers to gaining equal success. While venture capital investment is increasing for female-founded startups, progress is so slow that it will take a reported 25 years (until 2045) for all-female teams to even reach 10% of all deals at current rates.[l]

Perhaps more radical steps need to be taken to allow genuine leadership by women alongside men, within a business culture that doesn’t discriminate according to family commitments; improves networking and sponsorship for women entrepreneurs; and remains mindful that a perpetuated lack of women in leadership will slow the trickle-down effect of equal opportunities.

It’s up to industry leaders, government and women entrepreneurs to ask themselves how they can instigate these steps – starting today.


“Childcare is a major issue in this country. I’ve lost count of the number of mothers who’ve had to leave work due to the cost of childcare. Men keep their careers, while women are seen to be less valuable to their employers, have more stress, earn less and are the ones who leave the workplace to care for children. And, unfortunately, company leaders don’t help when they work all hours and miss family time to support corporate objectives. That sets a precedent for those who work for them. Women in business can be better supported by leaders setting an example. We need to better prioritise family values over corporate values and change the way we view employee behaviour when family reasons are behind it.” Caroline Wilson, Co-Founder of Toy Box Tots

“I’m at the start of my startup journey, however, the freedom and flexibility to be able to work when you have children at school is amazing. It’s changed my life and taken out the guilty stress that a 9-5 job gave. But I am also my own worst enemy – I doubt myself, sabotage my efforts and criticise myself for not doing enough. The thought that you might fail is always looming above you!” Lucy Drage, Founder of Jody & Lara

“I’ve been through some isolated, very negative events as a direct result of my gender, as well as having some amazing experiences in business. One portfolio manager said during a job interview that I’d give a mediocre performance before getting pregnant and going off on maternity leave costing the company lots of money.  Another time at an office Christmas party, someone asked me, ‘Why are you here, which one of the men are you going to try to shag tonight?’ We need to get around the requirement for women to sometimes play up being the girl and joke along, even when actually it’s over something that really needs to change.” Anonymous

“Ironically, being female-owned has been our greatest advantage. The healthcare communications industry is severely lacking in diversity – most competitors are owned by Caucasian, middle class males. Our agile working model allows brilliant people who take career breaks (often to have children) to come back to work. We are trail-blazing this in our industry and think it is hugely important that companies are challenged to diversify their supply chains. That said, women owned businesses like ours are wary of being invited to tick a box. We want to be in the mix because we are the best at what we do, and not just because of our gender.” Katie Langdon, co-founder of Skin and Blister Healthcare Communications

“The age of tech that we live in presents incredible opportunity for those that want it. Social media allows me to join communities the world over, but bootstrapping and networking as a solo Mum was painstakingly slow. Difficulty in accessing funding is the most obstructive force – the tiny size of seed rounds in the UK makes funding a B2B virtually impossible. Women, especially mothers, need funding sooner and they need more of it. We often do not have the same freedom as our male counterparts to attend meetups and drinks several times a week whilst raising children, and this is often how our male counterparts seek investors. I would like to see a better, more accountable and faster source of early stage seed funding set up as a joint effort between Government and Angel Investors, managed by an ethnically and gender-diverse, vetted panel. It’s unacceptable that a system presides over the UK, in which private Angel money is withheld from over 80% of female founders.” Anonymous




[iii] C. Rhodes, “Business Statistics”, House of Commons Library: Briefing Paper 06152 (28th December 2017)
















































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