Scotland must normalise female founder investment

The study found that investment into female-founded businesses actually fell from an already low base compared to male-led businesses in 2023 with the median amount raised by women per investment round less than a quarter of what their male counterparts had secured.

These grim findings come despite the huge efforts of groups including AccelerateHER and its sister organisation, Investing Women Angels, along with the likes of Equity Gap and EOS, which have been focused on bridging the equity investment gap to support the growth of more Scottish female-founded companies.

Promoting higher levels of female entrepreneurship was the foundation underpinning last year’s Pathways Report, commissioned by the Scottish Government and strongly supported by new economy minister Mairi McAllan, which set out key recommendations aimed at addressing the underrepresentation of women-led businesses.

This included a pledge to increase the overall number of female-founded start-ups. While this commitment is very much welcomed, it will only deliver limited economic impact unless it is now backed up with a focus on three clear priorities: (1) providing female founders with a ‘bridge to scale;’ (2) seriously increasing investment in female-founded companies to help them scale; and (3) normalising a belief that many Scottish female-led companies have strong scalability potential.

As numerous studies have shown, supporting female-led companies to help them achieve parity with those run by men can deliver huge economic benefits including job creation and higher levels of prosperity for everyone in society.

Investing Women Angels and AccelerateHER have now collectively helped female entrepreneurs raise over £120m in investment. Meanwhile AccelerateHER, has already established a ‘bridge to scale’ for Scottish female entrepreneurs including helping more than 320 of them to access the TechScaler programme in the past six months alone.

Additionally, AccelerateHER’s international market building missions have helped 90 innovative business founders to date, including Ishani Malhotra of life sciences company Carcinotech, to open doors into international markets and, in some cases, also secure growth investment to develop global trade opportunities.

While these efforts, alongside those of other female-focused investment groups, are helping increase the level of support for female founders, we also need more male investors and ecosystem players to support this journey.

The Scottish Government has a key role to play in this process by encouraging, incentivising and, perhaps most importantly, normalising investment into female-led companies; tackling the ‘sense of not belonging’ experienced by many female founders at present.

While the latest YCF report findings are a concern, headway is undoubtedly being made and the more we all come together to speed up progress, the sooner we will achieve the genuine equity and diversity in investment which will release so much economic growth potential.

Jackie Waring FRSE, founder of Investing Women Angels and AccelerateHER