Home Business NewsBusiness Female-led businesses see decrease in funding from investors

Female-led businesses see decrease in funding from investors

by LLB Editor
29th Jun 21 1:32 pm

Cutting-edge business data platform, mnAI, has created a report into ‘angel investment’ from the perspective of gender to assess how this affects investor support. An angel-investor can be key to a businesses’ early years by providing, not only the important financial backing, but also advice and guidance from the investor themselves as the business looks to grow.

mnAI have delved deep into the number of angel investors in the UK over the last 5 years and how the trend toward male investors has continued into 2021. The total number of investors decreased from 274,789 in 2016/17 to 188,117 in 2020/21, which is a decrease of 86,672 investors. Between May 2016 – May 2021, the number of female investors has dropped by 23,647, from 66,444 in 2016/17 to 42,797 in 2020/21.

The decrease in investors began in 2019/20, slipping by 33,933, then by 49,530 in the following year. There is also a decrease in investment numbers when you look at the number of investors who are putting their money into female led businesses.

Over the last 5 years, the number of women investing in female-led businesses dropped by 6.05%, and the number of men investing in those same businesses dropped by 11.76% over the same period of time. To put it into perspective, the number of women that invested in female-led businesses in 2016/17, was 18,671 (28.1%), by 2020/21, that number had fallen to 11,298 (26.4%).

The total number of male investors in 2016/17 was 163,829, of those, 41,776 (25.5%) were backing businesses with at least one female founder. By 2020/21, the total number of male investors had dropped to 115,034, and the number of those investing in female-led businesses has dropped even more, with just 25,883 (22.5%) opting to put their money into female-led businesses.

The trend toward female businesses being overlooked in favour of the alternative has been gradually growing over the last few years, with the percentage of angels investing in female-led businesses decreasing. The percentage of angels investing in female businesses has been decreasing year-on-year since 2016/17 and has shown no signs of stopping up to now. This clear decrease in the numbers brings with it, a lot of questions about the future of female-led businesses and how they can achieve that crucial funding to get their business off the ground.

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