A £450m collective to aid female entrepreneurs
Fund Her North aims to help northern-based female entrepreneurs and female-led businesses to gain investment, confidence and support in a business environment they often find even more challenging than their male counterparts.
The collective of 28 women brings together four angel investor networks, 10 venture capitalists and several northern entrepreneurs who collectively marshal considerable firepower, with a combined investment capacity of £450m.
The idea for Fund Her North came from Helen Oldham, who is head of operations for NorthInvest, the Leeds-based not-for-profit organisation she set up to help northern tech start-ups access angel investment.
“One of the things we wanted to do at NorthInvest was encourage diversity on the tech start-up landscape, and in my naivety I thought that would be a fairly easy objective to achieve,” she told The Yorkshire Post.
“But the more time I spent looking at the barriers to women getting the investment they need to scale their businesses, the more I realised that there was a really challenging landscape for them.
“When I was thinking about what we could do to change that, I reached out to all the people in my own personal VC network across the North and asked them what they thought – would they be interested in joining a collective? – and they all replied with a resounding yes.”
Those challenges were laid out in black and white last year, when one of the country’s leading businesswomen, NatWest senior executive Alison Rose, was asked by the Government to undertake a review of the barriers faced by female entrepreneurs.
Her findings made for sobering reading: for every 10 male UK entrepreneurs, there are fewer than five female entrepreneurs – a rate worse than the Netherlands and Sweden, as well as Spain and Greece.
If women founded start-ups at the same rate as men, there would be 1.1 million more businesses in the UK.
Female-led businesses are on average only 44 per cent of the size of male-led businesses, and male-led SMEs are five times more likely to scale up to £1m turnover than female-led SMEs.
“The statistics show some of the experience women are having out there, but as a seasoned investor myself, I have seen it first hand over and over again,” says Ms Oldham.
“The investment community isn’t fit for purpose for women all the time and it needs to be better – more entrepreneurs and businesses should feel able to approach investors.
“In my experience, it can be perceived biases that can stop us from realising our potential; we want to work with women to smash these thought processes down.”
Strikingly, those unhelpful perceptions can come from women themselves. The Alison Rose Review found that women were less likely than men to say they have the skills to start a business, and 55 per cent more women than men cited the fear of starting a business alone as a constraint.
Other barriers identified in the review include a lack of sponsorship and role models – fewer women than men know an entrepreneur – and less access to finance: it is estimated that less than 1 per cent of all UK venture funding is awarded to all-female teams, and women’s average starting capital is typically 50 per cent below men’s.
The Rose Review’s number-one recommendation was to increase funding directed towards female entrepreneurs, and that’s just what Fund Her North aims to do.
Research carried out in 2018 by UK BAA – the UK Business Angels Association – found that a woman investor is more likely to back a woman founder, and that 50 per cent of their portfolio is likely to be made up of female founders.
Taking up the baton, Fund Her North will link female entre-preneurs with female investors, each of whom has already made a lasting effect on the region; the collective has a combined investment track record of £75.5m already invested in startup businesses in the North.
Ms Oldham says the collective will be “sector-agnostic” and approachable – “no question is stupid” – and urges women looking for business funding to get in touch. “Because we’re a connector, and we all have access to funding via our own individual organisations, we could start looking at opportunities today or tomorrow.
“In fact, somebody did forward something to us straight away after the launch.”
Encouragingly, NorthInvest has actually seen an upturn in angel investment activity, closing 15 rounds of investment so far this year, compared with just 10 for the full 12 months of 2019.
With Fund Her North, Ms Oldham hopes to see similar interest. What we’re going to be measuring is the number of women that we have successfully supported through funding rounds and the total investment that we’ve awarded to women on an annual basis,” she says.
“We’re going to support women right from very early-stage, up to scale-up and exit.”
Crucially, although the impetus behind Fund Her North is driven by a desire for equity, Ms Oldham says investing in women-led businesses also makes sound financial sense.
“We’ve found that a female entrepreneur will typically generate up to 20 per cent more revenue in their business than a male entrepreneur – so they’re more successful, even though there are fewer of them, which is why they’re great opportunities to back,” she says.