Venture capital fund managers who are signatories to the Investing in Women Code (IWC) have consistently outperformed peers for a fourth consecutive year, the Department for Business and Trade’s annual IWC report has found.
This outperformance is best explained by the rise in the number of pitch desks and funding requested to angel groups from all-female teams, the report said. Further, 32% of all venture capital deals made by IWC signatories were in female-founded companies last year, compared to the market average of 28%.
The report also shows IWC signatories who consistently report data perform better in deals to teams with all-female founders than those who do not.
However, progress could be made on the average amount of angel investments into all-women teams – this is 50% lower than the amount invested in mixed gender teams and all-male teams.
The IWC’s aim is to address the lack of investment in female entrepreneurs in financial services and the investment landscape. In partnership with the Invest in Women Taskforce, it was founded in 2019 in response to the Rose Review’s findings that a lack of funding was one of the most significant barriers to women seeking to effectively scale a business.
Over 250 organisations have signed up to the IWC, showing the growing numbers of lenders and investors committed to increasing the levels of finance directed towards women-led businesses. IWC partners include the British Business Bank, British Private Equity & Venture Capital Association (BVCA), UK Business Angels Association (UKBAA), UK Finance and Responsible Finance. The report also found the market share of signatories’ deals continues to rise for the third year in a row, as the number of signatories increases.
Jenny Tooth OBE, executive chair of the UK Business Angels Association, said: “With an increasing number of our angel groups signing up to the IWC, including a growing number of groups with a strong proportion of women angels, we can see the impact on women founders seeking and finding angel investment across the UK.
“Signatories are attracting increased level of women founders into their pipeline, whilst, for the first time, deals in women founders have surpassed the number of deals in male founders accessing investment, achieving over half the deals and share of investment from the Angel group signatories.
“We have much more to do to enable all women teams to access their full share of investment. We will be working to ensure that many more of our Angel groups identify the benefits of being part of the IWC community in the year ahead.”
Theodora Hadjimichael, chief executive of Responsible Finance, added: “Community Development Finance Institutions (CDFIs) dismantle barriers in access to finance. Over 40% of CDFI lending is to women-led businesses because our sector designs products and services to help us say ‘yes’ to female founders.
“Many CDFIs are longstanding signatories to the IWC. We welcome the extension of the code and are delighted to be Code Partner for CDFIs. For the financial services sector to meaningfully address women entrepreneurs’ access to tools, resources and finance, we must work together.”
