Investing in Women Code closing the finance gap

Press release 07 June 2023

  • A higher percentage of venture capital deals made by Investing in Women Code (IWC) signatories feature at least one female founder as compared to the wider market, a new report shows

  • This is the third year in a row that IWC signatories have outperformed the venture capital market.

  • The report also shows that more diverse investment committees are key for bridging the investment gap.

  • With 204 signatories, the IWC now covers a significant proportion of the SME lending market and accounts for 39% of UK venture and growth equity deals, up from 24% in 2020.

35% of all venture capital deals made by Investing in Women Code signatories were in female-founded companies last year, compared to the market average of 27%, revealed in the latest report published today.

The Investing in Women Code was founded in 2019 as a landmark government-lead initiative in response to the Rose Review’s findings that a lack of funding continues to be one of the most significant barriers to women seeking to effectively scale a business.

Over 200 organisations have signed up to the code, showing the growing numbers of lenders and investors committed to increasing the levels of finance directed towards women-led businesses. Today’s report demonstrates that IWC members are leading the way in addressing the finance gap between male and female entrepreneurs. Equal access to finance will boost the potential of female founded businesses and deliver on the Government’s priority to grow the economy.

Business and Trade Secretary and Minister for Women and Equalities Kemi Badenoch, said:

With equal access to funding and support, female entrepreneurs could add £250 billion to the economy. It’s excellent that members of the Investing in Women Code are leading the way in addressing the finance gap between male and female entrepreneurs, ensuring that the UK is the best place in the world to start a business, regardless of gender. Kemi Badenoch Business and Trade Secretary and Minister for Women and Equalities

Other key findings from the Investing in Women Code’s third annual report show that:

  • Venture Capital (VC) firms that have signed up to the code represent a larger share of the market than ever before. The proportion of UK VC deals involving a signatory has risen from 24% in 2020 to 39% in 2022.
  • New signatories included British Patient Capital, the UK’s largest domestic investor in venture and venture growth capital, M&G Catalyst, one of the first large asset managers to join the Code; and the University of Exeter, the first higher educational institution to sign up, as the reach of the Code expands into new investor groups.
  • The number of deals made by VCs with all-female teams rose from 6% in 2021 to 9% in 2022 in the broader market, bringing it in line with the levels achieved by VC signatories which remained constant for the last year.
  • Female investors remain underrepresented on investment committees. Signatories report an average of 32% female representation in their investment teams and 24% on their investment committees. The report found a relationship between more diverse investment committees, and successful pitches from all female and mixed gender leadership teams, so this is a crucial area to address.
  • Reflecting the challenging economic backdrop, Angel group signatories recorded a decrease in the level of funding being requested by all-female teams as compared to 2021. This aligned with a fall in the requests made by their all-male counterparts.
  • With the addition of Funding Circle and six others during the year, the 23 lenders now signed up to the Code provide an extensive range of products and services to SMEs across the UK alongside targeted initiatives to support women led businesses.

The findings demonstrate that there has been important progress, but more work is required to close funding gaps.

Signatories are implementing a range of measures to improve their support for female entrepreneurs, including connecting them with female-focused networks, recruiting from a more diverse pool of candidates, providing mentoring and training for female founders and implementing diversity metrics and policies to achieve gender equity in the start-up ecosystem.

Minister for Enterprise, Markets and Small Business, Kevin Hollinrake MP, said:

It’s fantastic to see that we have over 200 signatories for the Investing in Women Code, and we’ve already seen dividends in the increasing success of female founders in accessing finance. Now that we have a community of committed signatories from across industry, we must keep pushing forward to bridge the finance gap for female entrepreneurs by getting more money out of the door. Kevin Hollinrake MP, Minister for Enterprise, Markets and Small Business
We are delighted to have seen a 25% increase in the number of Angel groups that have now signed up to the Code since the last report. This is a clear indication that the Angel community is actively seeking to better embrace diversity and recognise the investment potential among women founders. However, the data reflects the impact of a challenging economic climate for Angel investment in the latter half of 2022. We hope that 2023 will show an improving economic environment for Angel investing, boosted by more certainty over EIS and new enhanced SEIS and with further roll out of the Regional Angel Programme co-investment funds. At UKBAA we will be continuing to recruit more Angel Group signatories to the Code and working together with our community and Rose Review partners to redouble our efforts in taking practical steps for change, directly impacting the level of investment into female founders in the year ahead. Jenny Tooth OBE Executive Chair of the UK Business Angels Association
The British Business Bank was a founding signatory of the Investing in Women Code and British Patient Capital was one of the first institutional investors to sign up to the Code. We have seen huge progress in the number of venture capital firms becoming signatories since the Code was first launched and collectively we are driving change in investment behaviours which is resulting in better outcomes for diverse entrepreneurs. 39% of venture capital deals in the UK had an IWC signatory as a funder, providing us with good market coverage and valuable data which is already starting to demonstrate that IWC signatories are meeting their commitment to support more female-led businesses, compared with the overall market. However, whilst celebrating this milestone, we acknowledge that there is still more work to be done to reduce the significant funding gap for female entrepreneurs. We will continue to work together to unlock potential by ensuring that more of our talented and ambitious female founders and business builders can access the finance they need to thrive. Catherine Lewis La Torre Rose Review Board Member and British Patient Capital CEO
The contribution of female entrepreneurs is critical to the UK’s growth objectives and support for women-led businesses with the right mix of finance was rightly identified as a key driver of growth. That’s why I’m pleased to see not only more firms signing up to the Investing in Women Code but also the initiatives they have launched bearing fruit. The community of banks and non-bank lenders supporting female entrepreneurs is now beginning to pull together. The figures show there is more to do, especially across the regions and nations of the UK where finance ecosystems are less developed. UK Finance and our members are keen to play our part through collaboration and practical work across the UK. As a member of the Rose Review board, I’d like to thank my colleagues for their enthusiastic support. Stephen Pegge Managing Director, Commercial Finance, UK Finance
This year’s report highlights important progress, with a significant growth in signatories for the Code and a growing proportion of VC deals in the UK involving a signatory. But there is much still to do, and our industry remains committed to addressing the funding gaps between female-led and male-led investing. Our partnership with others in supporting the Code is about delivering meaningful progress and addressing the barriers which stubbornly persist. Michael Moore Chief Executive of the British Private Equity and Venture Capital Association

Notes to editors

  • The Third Annual Report can be found online here.
  • The Investing in Women Code is an initiative recommended by the government-commissioned Rose Review, led by NatWest CEO Alison Rose, into how best to support female entrepreneurs. The Code is designed to directly address the lack of investment going to female entrepreneurs from all corners of the financial services and investment landscape, from early stage and seed funding, to venture capital investment and bank loans.
  • The Investing in Women Code is a commitment to support the advancement of women entrepreneurs in the United Kingdom by improving their access to the tools, resources and finance they need to achieve their goals.
  • The Code commits signatories to:
    • Adopt best practices to improve female entrepreneurs’ access to finance needed to start and grow successful businesses
    • Nominate a member of the senior leadership team responsible for supporting equality in all interactions with entrepreneurs
    • Provide annual funding data disaggregated by gender to DBT, based on agreed guidelines. Providing data and analysis helps to promote greater transparency across the industry, highlighting where measures are working and where further measures may be needed.
  • A diverse and inclusive business ecosystem is good for customers, entrepreneurs, businesses, investors, and society. DBT together with the Investing in Women Code partners and signatory firms share a commitment to work in partnership to make the United Kingdom one of the most attractive countries in the world to start and grow a business by advancing female entrepreneurship. The Investing in Women Code Partners are the UK Business Angels Association, the British Private Equity & Venture Capital Association, UK Finance, and the British Business Bank.
  • New signatories are not required to provide data in their first year.
  • Organisations are eligible to become Code signatories if they provide debt or equity finance to businesses. Examples include banks and non-bank lenders, venture capital funds, private equity firms, Angel syndicates, crowdfunding platforms, and public sector providers.
  • DBT welcomes interest in the Investing in Women Code from all eligible organisations. Further information about the Code and an online sign up from are available on the British Business Bank’s website.