Investment in women's businesses falls as they suffer from 'unconscious bias', report finds
Investment in female-led businesses fell for the first time last year, figures from a Barclays study show.
The data shows that while a record level of investment went into new businesses, companies with at least one female founder saw the total put into their businesses fall by £1m.
This is the first time a drop has been reported since the data was first collected in 2011.
The proportion of funds invested in businesses with at least one female founder has risen from four per cent in 2011 to 15 per cent in 2016, but fell back to nine per cent last year.
Between 2016 and 2017, the amount of funding raised by male-led companies increased by 55 per cent, compared to a fall of 0.1 per cent for those with a female founder.
The report, by women's entrepreneurship group the Female Founders Forum, found that male investors are more negative about women who pitch to them and are more likely to dismiss their ideas.
Women make up a very low proportion of angel investors and venture capitalists, the report said.
One study by Harvard Business School found that if a business came with a female name, picture or voice, it reduced the odds of it receiving investment.
Questions from investors to female entrepreneurs tend to focus on potential losses, while those posed to men focus on potential gains, research suggests.
For example, a male entrepreneur might be asked “What major milestones are you targeting for this year?” while his female counterpart is more likely to hear “How predictable are your future cash flows?”
One woman who was pitching an underwear business said a male investor who she was pitching to told her "sorry, we only invest in things we understand".
She said: "They invest in complex and intricate technology, but I lost him when I said ‘bra’."
Women are also more likely to start businesses in sectors such as retail and services, which male venture capitalists are less likely to be familiar with, the report said.
Sophie Jarvis, head of the female founders forum, said: "The evidence is unequivocal: there is a growing disparity in funding between male and female entrepreneurs.
"There is significant evidence to support the fact that the funding gap is influenced to a large extent by unconscious biases from investors to the detriment of women.