Recently, the magazine Rose Review showed that in 2021 in Wales, women created just under 5,000 companies – a record number that has more than tripled since 2018.
This is great news, but this trend underscores the need to ensure that women founders have access to the support and resources they need to help their businesses thrive.
Access and awareness of funding are key. Women who run a business in Wales need to know what money they have and how they can provide what they need to grow their companies.
A code of conduct designed to make sure investors do just that now has more support than ever. The new figures show that 160 institutions – from major banks to venture capital companies to individual angel investors – have signed the Women’s Investment Code.
The data of those who signed this code show that we are making some progress. For example, the average amount of funding that all women’s teams sought from angel investors in 2021 was almost the same as the amount requested by men. It has been a big leap forward since 2020, when women entrepreneurs asked for less than twice as much as their male counterparts.
But there is a long way to go for women entrepreneurs in Wales who are trying to scale their business. Despite the issue of more funding, businesses that run women still tend to earn less than men. If we look at the whole angel market, the British Business Bank data show that only 10% of all angel investments currently go to women’s teams and only about 22% to mixed teams. Almost 60% falls on all men’s teams.
There are many reasons for this shortage, but we know that in part this is due to the lack of women investors who themselves are more likely to invest in women entrepreneurs and tend to have a portfolio that accounts for 30-50% of women-run businesses. .
But currently only 15-18% of angel investors in the UK are women, and 57% of them are in London and the south-east, the proportion of women investing in Wales is even lower. This reason is due to many factors. One is the view that angel investments are too risky for women and only for the very rich.
But this is not the case. Investors can overcome this by investing through unions that allow angels to spread risk, share knowledge and skills, and invest smaller amounts in each trade. It can also be a way to meet and work with interesting people, making it even more interesting.
Another major barrier for women investors is a lack of knowledge and ignorance of where to start.
Many women are looking for support locally, which is why Angels Invest Wales (part of the Development Bank of Wales) held its first event for women business angels earlier in the spring, bringing together women from different professional backgrounds to share their experiences and learn more about opportunities that may offer investing angels.
A key outcome of the event was the launch of Women of Angels in Wales as a new new initiative to raise women’s awareness and knowledge of angel investments, encouraging them to participate and grow the powerful community of angels in Wales. Angels Invest Wales connects investors with innovative and inspiring Welsh businesses looking for private investment.
And there are plenty of inspiring local businesses to choose from. Health & Her, for example, is a great example of a women-led business that has gone from strength to strength through the investment of angels. Specializing in women’s health, in 2019 the company secured six-figure investments from the Development Bank of Wales along with funding from the Angel Syndicate and the Welsh Angels Co-Investment Fund. Co-founder and CEO Kate Bash was so inspired that she has now become an angel investor.
I was excited to take part in the launch of this exciting new initiative, which reflects the spirit of our goals in the Women’s Angels Investment Task Force, in setting up our nationwide Women Support Women campaign to empower more women across the UK to invest in women founders. .
The company’s mission is to work with groups of angels, such as Angels Invest Wales, regionally to inspire, train and support women across the UK to become business angels and investors at an early stage. By increasing the number of women angels, we aim to make more women founders across the UK more likely to access funding to expand their business wherever they are.
Of course, change is not just for women. Obviously, men have their part of the game, and there are a lot of male angels who do just that. But the data isn’t lying, and we know that low levels of female angels are an issue we need to change to shift the dial.
The UK has a lot of energy and appetite for change. We need to make sure that we translate this energy into real action and reach women who previously might have thought that investing angels was not for them.
These women hold the key to unlocking the potential of current and future founding women across Wales and creating a thriving and innovative ecosystem of entrepreneurs.
