Liverpool city region angel investment network Gateway Angels is joining a push to widen access to finance for entrepreneurs from all sections of the community.
At a recent event in Liverpool, Delyth Edwards, a senior manager for the British Business Bank outlined how white male business founders were still receiving the lion’s share of investment. The British Business Bank provides Government-backed funding for smaller businesses.
Gateway Angels, backed by local funding specialist MSIF, partnered with the British Business Bank and UK Business Angels Association to host the latest in a series of regional activation events to extol the benefits of angel investing.
In her presentation to the attendees called Embracing Diversity in Angel Investment, Delyth outlined the scale of the problem. She revealed that in 2022 just 13% of first-time equity deals went through all female teams.
That represented just 6% of total investment and 72% of deals went into all male teams. Additionally, just 10% of first-time equity deals went to all ethnic minority teams in 2022. 19% of total investment value. 74% of deals went to all white teams.
Between 2009 and 2019 more than 40% of total venture capital invested in seed stage went to founding teams with an ‘elite’ education.
Now the bank is working with other partners across the UK to redress the balance. It is expanding access to funding for female entrepreneurs and will aim to invest up to £50m into female-led funds through its existing programmes.
This investment will support the aims of the Invest in Women Taskforce, which is an industry led, government backed initiative committed to increasing finance for female entrepreneurs.
A female-led angels syndication pilot in the north of England, the Midlands and in the devolved nations has recruited more than 180 angel investors and so far 29 deals have been completed – 22 of which are female-led and seven are mixed gender teams.
Angel investors are typically wealthy individuals who provide capital for early-stage businesses or start-ups, usually in exchange for convertible debt or ownership equity. This method has been popularised by the BBC reality show Dragons’ Den.
Often angels are successful entrepreneurs themselves and are either looking at some alternative ways to invest their money or they want to give something back. Many relish the prospect of getting involved in an exciting new venture.
In Liverpool city region Gateway Angels looks to bring angel investors and entrepreneurs together. Director Katie Nicholson is getting fully behind the British Business Bank push.
She said: “As long ago as 2019 the Alison Rose review of female entrepreneurship showed the UK economy was missing out on huge productivity gains because too many women were not getting access to finance.
“This report estimated that underrepresentation of female business owners equated to a potential loss of £250bn a year to the UK economy. Not only is that ridiculous, it is also a pretty straightforward problem to fix.
“There is a huge appetite among would-be female entrepreneurs. We just need to offer them the opportunities to get access to investment. Eventually you build an eco-system that becomes self-sustaining.
“The whole ethos of angel investing is people who have built successful businesses using some of the wealth they have generated to support new entrepreneurs. The potential benefits of creating a whole new generation of businesswomen are huge.”