Female Founders Shut Out of Funding Again

Women are building Britain’s businesses… but the money STILL isn’t reaching them.

Female founders across the UK are being starved of investment. New figures show the share of equity funding going to all‑women teams is stuck at a shocking 2%. That’s the same pitiful level we’ve seen for ten years.

Women get fewer deals, smaller deals, and less follow‑on funding

A new report from the British Business Bank shows:

• All‑female teams raised just 7% of UK equity deals, unchanged for a decade.

• Mixed‑gender teams saw their share of deals drop from 28% to 25%.

• Their share of investment value fell from 18% to 15%.

• Women‑led teams raise rounds four times smaller than all‑male teams.

• Only 43% of female teams secure follow‑on funding, compared with 51% of all‑male teams and 57% of mixed teams.

AI boom makes the gender gap even worse

A record 44% of all UK equity investment last year went into AI companies, but women founders barely got a look‑in.

• Only one AI deal over £10m since 2021 involved an all‑female team.

• Just 3% of AI deals went to all‑female founders, even lower than the already‑dire cross‑sector average.

• Venture Capital firms with equal or majority female decision‑makers make up just 4.5% of those backing AI, and control only 3.4% of the capital.

The UK is losing £250 BILLION

The Rose Review says the UK could add £250 billion to the economy if women started and scaled businesses at the same rate as men.

That’s not a rounding error. That’s a national growth strategy. But female founders face:

• systemic bias

• smaller networks

• fewer warm introductions

• less investor diversity

• entrenched cultural norms

• lower access to follow‑on capital

The Women and Equalities Committee calls it “significant disadvantage”. Female founders call it the same old story.

New funding pots ARE coming and you can access them

Despite the grim stats, there are real opportunities for female founders, if you know where to look.

Grants (Free Money, No Equity, No Repayment)

Perfect for early‑stage female founders.

Where to find them:

• Innovate UK Women in Innovation Awards

• Local Growth Hubs

• Mayor’s Offices (London, Manchester, West Midlands)

• Arts Council / Creative UK (for creative businesses)

• Sector‑specific grants (health, sustainability, manufacturing)

Best for:

• Product development

• Prototypes

• Market testing

• Hiring your first team member

Loans (Low‑interest, founder‑friendly)

Not glamorous, but reliable.

Where to find them:

• Start Up Loans (British Business Bank)

• Regional loan funds (Northern Powerhouse, Midlands Engine, Cornwall & Isles of Scilly)

• Community Development Finance Institutions (CDFIs)

• NatWest, HSBC, Lloyds female‑founder programmes

Best for:

• Working capital

• Equipment

• Marketing

• Hiring

Equity Investment (Angel, VC, Funds)

This is where the gender gap is biggest but new schemes are opening doors.

Where to find them:

• Women Backing Women Fund of Funds (£130m)

• Angel Academe (women‑led angel network)

• Mint Ventures

• Ada Ventures (inclusive VC)

• Fund Her North

• Female Founders Rise

• British Business Bank’s regional equity funds

Best for:

• Scaling

• Tech development

• National expansion

• Big hires

Tax‑efficient investment (EIS & SEIS)

These schemes encourage investors to back early‑stage businesses but women founders rarely get access.

Where to find investors using these schemes:

• Angel networks

• Crowdfunding platforms (Seedrs, Crowdcube)

• Regional angel groups

• Female‑focused investor communities

Investors get tax relief, making them more willing to back early‑stage female founders.

Accelerator & Support Programmes

These give you networks, mentors, and investor access.

Where to find them:

• Barclays Eagle Labs

• NatWest Accelerator

• Tech Nation successor programmes

• Google for Startups

• Female Founders Rise

• We Are Radikl

• Hatch Enterprise

Women are building Britain’s businesses, but the money STILL isn’t reaching them. The stats are brutal, the bias is real, and the AI boom is making the gap even worse.

Female founders are outperforming, out‑innovating and out‑surviving, and the UK economy desperately needs their growth.

The funding landscape is changing. New pots are opening. New investors are emerging. New schemes are being built specifically for women.

The share of equity investment going to all female-founded businesses remained at 2% in 2025, the same as the average across the last decade.

All-female founder teams also raised only 7% of UK equity deals, again the same figure for the past 10 years, according to the report by British Business Bank.

Other data showed the proportion of deals raised by teams comprising at least one female founding entrepreneur was 25% in 2025, down 3% on 2024.

The share of investment value captured by these teams also decreased from 18% to 15%.

The study showed that a record 44% of all UK equity investment into smaller businesses went to AI companies last year, driven by several large “mega deals”.

It warned that the “increasing prevalence of large equity deals among AI companies in 2025 are exacerbating these trends on a value basis”.

Of all AI-related deals above £10 million since 2021, only one has involved companies founded by all-female teams.

Just 3% of AI deals went to all-female founder teams, lower that the cross-sector average of 7% and even lower than the average for deals relating to technology/IP-based businesses (5%).

The gender of investors is also an issue, with the report saying the underrepresentation of female decision-makers in the venture capital industry is “highly pronounced” among those backing AI-related deals.

Recent research looking at UK trends between 2012 and 2022 found that VC firms with equal or majority representation of women at the decision-maker level made up only 4.5% of all those who invested in AI and accounted for an even smaller share of total capital invested (3.4%).

The imbalance is also shown by data on the gender breakdown of investors claiming tax relief under EIS and SEIS.

Over tax years 2022-23 to 2024-25, female investors accounted for 19% of EIS claims and 14% of the value of those claims. For SEIS, it was 18% of claims and 14% of claim value.

In other findings, female‑founder teams raised much smaller deals on average, with all-male teams consistently raising rounds that were around four times larger. Women teams were also less likely to secure follow‑on funding than all‑male and mixed‑gender teams.

Following their first funding round, only 43% of female founder teams went on to raise a subsequent round, compared with 51% of all-male teams and 57% of mixed gender teams.

Boosting funding for female entrepreneurs

The persistent lack of progress in female representation among equity-backed companies comes despite several efforts to tackle it. Examples are the Investing in Women Code which aims to tackle gender funding disparities in financial services.

The Invest in Women Taskforce, which was set up in 2024 to boost the amount of finance going to female entrepreneurs, is setting up funding schemes, including the £130m ‘Women backing Women Fund of Funds’.

A report by the Women and Equalities Committee last year said female entrepreneurs face “significant disadvantages in accessing finance, networks and support due to systemic bias, a lack of diversity among investment decision-makers and entrenched cultural norms.

The Rose Review of female entrepreneurship, led by former Natwest Group CEO Alison Rose, said £250 billion could be added to the UK economy if women started and scaled businesses at the same rate as men.