Women raise an average of £10,000 funding for their start-up compared to £15,000 for men, prompting Pam Alexander, co-chair of the Women’s Enterprise Task Force, to say ‘ the undercapitalisation of women-owned businesses results in under performance and slower growth’. It isn’t clear why this should be the case – though many women report feeling that they weren’t being taken as seriously as their male counterparts when applying for funding. Fingers crossed these attitudes are changing. Banks are definitely seeing the potential in attracting more female business owners and entrepreneurs, and there is a growing realisation that female-owned firms can be much more than ‘lifestyle businesses’.
However, women are more likely to use their own savings and capital from family and friends. Says Katie Allcot, founder of FRANK water and the Grazia O2 Entrepreneur of the Year 2007: “We did not 'apply' for funding as such, I started FRANK using personal savings and with lots of support from family and friends. We were offered loans from banks etc, but it was my aim to start FRANK in a way that meant it wasn't paying off loan charges, so that maximum donations went to the clean water projects.”
Women are also less likely to receive investment in their business. This may be because if the relative lack of women investors. According to the Inland Revenue, there are now more female millionaires between the ages of 18 and 44 than men, but women make up only 5% of the UK’s business angels. There are now a growing number of schemes to help balance this disparity.