More female founded scaleups than ever are breaking through the £10m turnover barrier. But we know that more needs to be done. In the first episode of the ScaleUp Podcast, Oli Barrett and Irene Graham talked with Julie Baker, head of enterprise and climate engagement and partnerships at Natwest; Erin Platts, head of EMEA and president of the UK branch at Silicon Valley Bank; Sahar Hashemi, serial entrepreneur; and Sam Smith, founder and former chief executive of finnCap group, about the landscape for female founders and how the ecosystem can support their ambitions to scale. Here are some edited highlights of their conversation.

What are the main hurdles that female founders are facing?

Julie Baker

The original Rose Review in 2019 highlighted that if women were to open and scale businesses at the same rate of men, up to £250bn of new value could be added to the UK economy by 2030. We are on our way but there is still lots to do.  

Funding remains the number one barrier at every stage of the business journey, especially at that scaleup stage. Some female founders are less aware of the funding options, others are less willing to take on debt. And there are other barriers: not having the networks and contacts to get those warm introductions to the right connections that some of their male counterparts may have.

There is work to be done to recruit more women into VC investment. On average, only 13% of senior people in VC investment teams are women. Most VCs are male. In the angel space, there are more positives; angel groups with more than 15% female representation are investing more in female-founded businesses.

Sam Smith

I am on the women-led high-growth enterprise taskforce. One issue is why aren’t women either asking or getting as much money as men? Why are men five times more likely to scale to £1m-plus in turnover? 

We see some big gaps around the £100 to £500,000 investment level. We see that women raise £100,000 while men raise £500,000, with that money coming from networks and angels. Men generally have that network so they can scale from that £500,000 to £1m in revenue. It is a key part of the scaling journey and we are looking at how this can be addressed.

But this runs all the way through the finance ecosystem – there have been only seven women-led IPOs in the last few years. All the statistics show that women don’t ask for as much money. Part of this lies in having the confidence, the networks, the role models, the encouragement, collaboration and mentorship, to think big. Part of it lies in the financial system which is very male-heavy and very misunderstood.

Sahar Hashemi

Women are problem solvers; they see a problem, they want to solve it. We need to increase their ambition and remove their fears around growing a business. I’ve worked very closely with a lot of female founders in the consumer space: they have these gems of businesses which are close to their customers and highly disruptive but some of them just don’t have that ‘think big’ approach. 

But it’s not just about increasing ambition. This is systemic; you need alignment and awareness and knowledge of finance, as that is extremely important to increase confidence around growth. And you need connections, putting people together. 

Could you highlight some particular initiatives in the ecosystem that are supporting female founders?

Julie Baker

The Invest in Women Hub aims to demystify fundraising, connect and accelerate female entrepreneurship. It also helps female founders navigate to other support sites, events and organisations that support women. 

Erin Platts

The EQL:Pledge is a collective agreement that sources of capital have a responsibility to invest into female led businesses; signatory firms would share their data and their traction, and be held accountable publicly for making sure that their funding actually finds its way into female founded businesses. 

Sam Smith

There is progress – the latest Rose Review data showed that more than 140,000 female led businesses were set up last year. The ScaleUp Institute’s Female Founder Index showed a 35% year on year growth – that is a pretty big statistic. 

Sahar Hashemi

My biggest call to action is a new campaign called Buy Women Built. We have got so many innovative and disruptive female founded brands around us but we don’t know they’re female founded. We want to join up consumers who buy with a mission and purpose of their top of mind with these incredible brands. It’s a consumer campaign to bring visibility to female founders; the power of getting consumers behind them is absolutely enormous. Picking up a product and knowing it is female-founded will go a long way to dismantling the cultural and psychological barriers to female entrepreneurship.

Are the current funding markets helping female founders to raise money?

Erin Platts

We work with innovation businesses and from that perspective things are changing incredibly quickly. The landscape has materially changed recently; the velocity of rounds has slowed – they are taking longer to close. There has been re-pricing and it’s harder to raise money than it has been for the last couple of years. But I believe that there is still plenty of finance available to innovation businesses. There’s a concentration of capital in London and in this particular environment, London is where you will have the highest chances of success in fundraising.

The big needle mover is the source of capital. We are working with partners such as Included VC, Diversity VC and the Newton Venture Program, because if you have diversity within sources of capital, it’s going to help funnel that capital into businesses that may have been previously overlooked. Female founders who approach funds that have a bias towards change are probably going to increase their chances of getting positive meetings.

We are also trying to bring together female founders with a focus on a sub-sector – such as fintech, which historically has had more female founders – rather than on geographic location.  

What’s the single piece of guidance you would give to a female founder who is aiming to scale their business?

Erin Platts

Just keep going, put yourself out there and really work that network – there are people who genuinely want to support and help you.

Julie Baker

All around the UK there are accelerators, hubs and support networks – use them for access to mentors, experts, coaches, for help with your pitch document and your pitch practices. Be relentless: you’re not going to get a yes the first time you ask for investment.

Sahar Hashemi

Having belief in a product that comes from fulfilling a genuine customer need is such a strong point. Female founders have all the tools they need to grow; they have to network and access the support that already exists to reach their full potential.

Sam Smith

Think big. Get out of your comfort zone but at the same time trust your gut to be different. It’s really important to be different.

How can the ecosystem continue to support female founders?

Erin Platts

We have to collaborate. This issue is bigger than any one of our single firms, and we need to work together to sort it out. More collaboration is happening in the non-equity markets. Historically, banks have not been that collaborative but I’m really pleased to see competitive firms recognising that they need to work together to solve this really important problem – to funnel non-dilutive capital into some of these companies is a big deal. 

Julie Baker

We all need to collaborate and work together in supporting female founders. The Investing in Women Code creates greater transparency and provides data across the UK funding landscape. The number of VCs that have signed up to the code has increased from 50 to 90. Currently about 160 banks, financial institutions, institutional investors, VCs, angels, have signed up and we are campaigning to increase that to 200.

Sahar Hashemi

We just need to keep going. There is so much extraordinary work being done so let’s just keep aligning and shouting about it.

Sam Smith

At a broad level, the government has to support and champion this issue – and champion ambition generally – which could be through tax breaks, making childcare tax-deductible, through having a strategy for entrepreneurship, and really thinking about how we do not leave anyone behind.