Women are starting businesses across the UK at an unprecedented level. In 2023 alone, 164,000 companies were founded by women, and almost half of early-stage entrepreneurs are female. The Midlands is emerging as a hotspot for female entrepreneurship, with the West Midlands in particular ranking as having the 3rd highest female leadership percentage for a UK region.
Yet when these businesses seek investment, the picture changes: in 2024, all-female founding teams received just 2% of equity funding, while all-male teams secured 80%.
This funding gap is not just a challenge for female entrepreneurs – it limits the growth potential of the UK economy. Understanding why it persists and how women can successfully scale with the right support is crucial.
Why the funding gap persists
Investment decisions often rely on familiarity. Founders who resemble previous successes, operate within known networks, or present rapid, high-visibility growth are more likely to receive funding. Businesses built on operational strength, recurring revenue, and measured expansion – more common among female founders – can appear less dramatic at pitch stage, even though this model can deliver strong returns.
Changing these outcomes requires shifting how investment opportunities are evaluated: who makes the decisions, what counts as credible experience, and how risk is interpreted.
Midlands companies demonstrating success
An undeniable example of the success that can be achieved when female powered businesses receive the right support is Skewb – a Warwick-based leading provider of digital transformation services to the energy and water sector. After growing revenue fourfold in three years, the business received backing which enabled it to develop proprietary software and services covering several business process areas and invest in its people, or ‘skewbers’ as the company calls them.
How founders approach scaling
Understanding investor behaviour helps explain why founders must approach fundraising strategically, which is useful for women looking to scale.
- Choose a partner who helps you create value
For a growing business with ambitions to expand, the advice and experience of potential investors can be invaluable. This is the kind of strategic support that is difficult to replicate through debt funding or capital markets alone.
- Be clear and transparent on why you want investment
Start by clarifying why you’re seeking investment. Be upfront about where your business stands – the strengths, the challenges and areas for improvement – as well as what you ultimately want to achieve. That level of transparency is what leads to a deal that works for you, not just for your investors.
- Build a supportive network
The investment community can still feel male dominated, but that should not be a barrier. A growing number of networks and communities exist to support female founders, alongside investors who actively champion diverse leadership. Surrounding yourself with the right people can transform your entrepreneurial journey, strengthen your confidence and ensure your successes are both recognised and celebrated.
Support available to female founders
Responsibility does not sit only with founders – investment practices must also evolve.
Improving access to capital requires consistent commitment. As the most active investor in the UK for female powered businesses, BGF has pledged at least £300 million to female-powered businesses across the UK over the next five years, building on its initial £25 million contribution to the Invest in Women Taskforce, which helped raise over £250 million last year.
As a signatory to the Investing in Women Code, developed with the Department for Business and Trade, we share data and adapt investment practices to widen access to funding. Meanwhile internally we maintain near gender parity and increasing female representation across investment teams and on portfolio boards – recognising that diverse decision-makers materially improve outcomes for female entrepreneurs.
Beyond investor initiatives, other programmes support female founders, including the Women in Innovation Award, the Female Founders Fund and organisations including The King’s Trust. Business Growth West Midlands also offers free tailored support for businesses in the region.
Accepting the challenge
Women are driving growth in the Midlands and across the UK business landscape, yet more must be done to create inclusive entrepreneurship. Capital alone is not enough. Networks, mentorship and visibility are crucial to accelerating the success of female business leaders. Increasing representation on boards and nurturing strong mentor-mentee relationships are practical steps the industry can take to unlock the potential of female-powered businesses in the Midlands – not just on International Women’s Day but long into the future.
Jill Williams is Regional Partner for North & Midlands at BGF – the UK and Ireland’s most active growth capital investor. BGF has been recognised as the #1 investor in female-powered scale-ups in the UK over the last five years (ScaleUp Institute).
