According to a UK government report, venture capital fund managers who have committed to the Investing in Women Code are more inclined to invest in female founders.
The Investing in Women Code was established in 2019 as a government initiative in response to the Rose Review’s findings, which identified funding shortages as a significant barrier for women aiming to scale their businesses effectively.
After five years, over 250 organizations have signed up for the Code, reflecting a growing commitment among lenders and investors to increase financing for women-led businesses.
Last year, 32% of all venture capital deals made by signatories of the Investing in Women Code were directed towards female-founded companies, surpassing the market average of 28%. This marks the fourth consecutive year that signatories have outperformed the broader ecosystem.
The report from the Department for Business and Trade also indicates that signatories reporting data consistently tend to perform better in securing deals with all-female founding teams compared to those that do not.
However, challenges remain, as the average amount of angel investment for all-female teams is 50% lower than for mixed-gender teams and all-male teams.
Jenny Tooth, executive chair of the UK Business Angels Association, commented, “With more of our Angel groups signing up to the Code, including many with a notable proportion of women angels, we are witnessing a positive impact on women founders seeking and securing angel investment throughout the UK.”
Christine Hockley, MD of funds at British Patient Capital, added, “The Investing in Women Code report clearly shows a link between gender diversity in senior roles at VC firms and the level of capital directed towards female entrepreneurs and women-led businesses. The data indicates that when investment teams have 50% or more female members, teams with at least one female founder are more likely to progress to the Investment Committee stage.”
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