VC fund managers supporting The Investing in Women Code more likely to invest in female entrepreneurs
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Venture capital fund managers who supported the Investing in Women Code are seemingly more likely to invest in female founders, based on a report by the UK government.
VC Deals Made By Investing in Code Signatories On The Rise
The Investing in Women Code is an initiative founded back in 2019, which was launched in response to the Rose Reviews findings. The findings said that there was a major lack of funding for women-led businesses, which was estimated to be one of the major barriers to women seeking to scale a business.
In response, the UK government started the initiative, hoping to change this. Now, five years later, more than 250 organizations have signed up to the Code, showing that the number of lenders and investors committed to boosting levels of finance directed toward women-led businesses is on the rise.
Last year, 32% of all VC deals made by investing in Code signatories were in companies founded by women, which is a notable increase compared to the market average of 28%. This was also the fourth consecutive year that signatories hae outperformed the market average, showing that the support for female-founded firms is on a continuous rise.
A report by the Department for Business and Trade revealed that signatories who consistently report data on a year-over-year basis have been performing better in deals with teams with all-female founders when compared to those who do not.
There Is Still A Way To Go On The Road To Equality
Despite the rising figures, the average amount of angel investments in all-female teams is still 50% lower than investments in teams with all-male teams or mixed gender teams. So, while there is noticeable progress, there is still a way to go until true equality is reached in this aspect of the business world.
Commenting on the matter, the UK Business Angels Association’s executive chair, Jenny Tooth, stated that the increasing number of Angel groups signing up with the Code — including a growing number of groups with a strong proportion of women angels — shows that there is a considerable impact on women founders seeking and finding angel investments across the country.
Meanwhile, the MD of funds at British Patient Capital, Christine Hockley, stated: “The Investing in Women Code report continues to demonstrate there is a clear link between gender diversity in senior roles at VC firms and the capital going to female entrepreneurs and women-led businesses.”
Hockley added that the data shows that when investment teams have 50% or more female members, teams with at least one female founder are more likely to reach Investment Committee stage.
