Starting a new business and being an entrepreneur is a daunting task for anyone but it seems that female founders face more challenges than men, and often these obstacles are women-specific. In some ways Covid-19 has exacerbated their plight, but in others, it has helped to create new opportunities.
In the U.K., just one in three entrepreneurs are women. Closing this gender gap could add an additional £250 billion to the UK economy, equivalent to four years of economic growth, according to findings from the Alison Rose Review of Female Entrepreneurship.
Now more than ever, more female founders are needed, however, the pandemic and lockdown have done little to boost their cause, especially if they are parents, as research by the Institute for Fiscal Studies (IFS) and University College London (UCL) revealed that women have been taking on the lion’s share of care responsibilities during lockdown, reducing the time they have available for work or running a business.
The trend was also reflected in data from Virgin StartUp, which last year pledged to fund men and women founders equally by the end of 2020. Earlier this year 43% of funding applications came from women founders, rising to 47% by mid-March, but within the first six weeks of lockdown, this had fallen to 23%.
“Before the crisis, we already knew that women, typically, were less likely to get funding, and when they did, they’d get less of it,” says Virgin StartUp chairwoman Linda Grant. “Lockdown only exacerbated this and almost immediately we sensed that women were going to be hit harder, with the research we saw confirming what we already strongly suspected.”
Funding has been an issue for all founders. While the government rolled out a £330 billion ($409 billion) loan scheme and other relief measures to help firms through the crisis, loss-making startups struggled to access the funding because they were unable to prove they would be ‘viable’ if not for the disruption caused by Covid-19, which was part of the eligibility criteria.
Over the last few years, the U.K.’s Start Up Loans scheme has proved to be a lifeline for founders, including women. Set up in 2016 by mother and daughter team Loral and Eishel Quinn, Edinburgh-based fintech startup Sustainably encourages customers to make a positive social impact by rounding up their cashless transactions and donating ‘spare change’, distributing micro-donations to their chosen good causes. In the early stages of starting up, patently aware of the gender bias that existed in business funding, the founders secured a £50,000 Virgin StartUp loan.
“We wanted to retain as much ownership of the business as possible, so the best way forward for us was via a startup loan matched by some grant funding,” says Loral Quinn. “Raising funds has been even harder over the last few months as some of our investors’ businesses were adversely affected by the crisis. Things are changing, but it does need to happen faster.”
But the impact of Covid-19 has also presented opportunities for women, both in the workplace and in business. For example, working from home has leveled the playing field by removing the hierarchy, which statistically places more males in the upper tiers, and encouraging leadership styles that are more empathetic. The challenge now is not to fall back into those old mindsets, says Lesley Heath, cofounder of business consultancy A Matter of Choice.
She says: “Working more flexibly from home provides the advantage of being able to prioritize either business or home life when required, and work in a way that suits your needs and those of the business, which is now more widely accepted as general practice.”
Nevertheless, not all women have had a positive experience working from home, having to deal with the emotional consequences of recent events and changing the way they work overnight.
“This has caused burnout, particularly among females, who are trying to manage it all, remotely,” says Heath. “Coaching, on an individual or group level, can help them to manage this and encourage their confidence and their productivity levels to soar.”
A lack of self-belief is one of the biggest barriers facing female entrepreneurs, but as Simon Paine, cofounder, and CEO of PopUp Business School, explains, they have reason to feel more confident post-COVID.
“We are in new territory and, in many ways, this is a once in a lifetime opportunity for starting something completely new,” he says. “We will never get a chance like this to step back out of our day-to-day, to reflect, and create something that is important to us. Look at what people want and need at this time and how you can provide them in a way that aligns with your passions and interests.”
Linda Grant is also optimistic for the future, insisting that the challenges everyone has experienced during the crisis and the struggles they have seen women founders face during this time have only served to strengthen their resolve.
She says: “The drop off in loan applications that we saw in the early stages of lockdown is beginning to improve. There will be massive headwinds along the way, but the 50/50 gender funding pledge was an important commitment that we made last summer, and that ambition hasn’t changed.”