Despite making up half the population and growing their wealth steadily, women represent just 14% of angel investors in the UK. This glaring disparity signals a significant untapped potential in the investment world. However, don’t let the statistics on how little funding goes to female founders discourage you!
Do Female Investors Have an Impact?
Absolutely. A recent report revealed that a staggering 74% of UK angel investment in 2022-23 went to all-male teams. This lack of women investors has a detrimental impact on women-led startups across the UK. Another Diversity Data Report from 2023 shows that only 2.6p of every £1 of equity funding went to women founders—a disappointing figure. Yet, there’s a silver lining: according to the IWC report of 2023, women angel investors allocate between 25-50% of their investments to women founders.
Benefits of Becoming an Angel Investor
Becoming an angel investor offers numerous benefits:
Significant tax breaks
Opportunities to leverage business expertise
The chance to develop networks with successful business owners and fellow angel investors
Support our future
These advantages make angel investing an attractive option for women looking to diversify their investment portfolios and support promising start-ups.
The Challenge of Being a Female Entrepreneur
Female entrepreneurs often face significant hurdles when trying to secure investment, especially from women angel investors who could bring diverse perspectives to their cap tables and decision-making processes. Many women entrepreneurs have found that having women angels on board is instrumental to their growth and expansion. Women angels offer not only financial support but also invaluable advice and guidance through their extensive networks.
The Power of Diversity
Gillian Fleming, co-founder of Mint Ventures, emphasises that women-led and diverse businesses deliver more sustainability and profitability. Fleming notes,
“It is our mission to educate and inform women that they too can be part of the success story by supporting more women-led companies in often overlooked sectors.”
The Under-Estimated Advantage of Women
Women control $72 trillion of the world's wealth and are set to inherit 70% of the wealth passed down from previous generations. Teams with at least one female founder deliver high exit returns, which increased by 2.5 times from 2020 to 2021 ($31.4bn to $73.3bn). Backing female entrepreneurs could increase global GDP by up to $2.3 trillion and generate 288-433 million jobs globally. Companies with diverse founding teams perform 2.5 times better than those without.
Let’s Connect and Grow!
The market for innovative solutions created by women is obviously vast and under-exploited. By getting more women angel investors on board, we can support more promising entrepreneurs, enhance diversity in business, and unlock significant economic potential. For more information and to start your journey as an angel investor, visit Angels Den’s Investment Opportunities page today. Let’s bridge the gap and make a meaningful impact together!
Written by Bella White, Investor Relations Analyst at Angels Den, Europe and UK’s largest angel-led finance platform helping early stage companies and SMEs get easy access to growth capital.