How companies and organisations can use data to support female entrepreneurship
There’s a big problem with investment for UK female-founded companies.
mnAI’s Female Investment SME Report from June 2021 highlights some troubling statistics. It reveals that, although there has been a steady rise in the % of companies with at least one female founder raising capital since 2011, these companies represent a fraction of the number of all-male companies raising capital. (And 2020-21 figures suggest the Covid-19 pandemic has had an impact, slowing the rise in numbers of female entrepreneurs.)
The report also shows that male angels are less likely than female angels to back female companies, with that likelihood decreasing over the last five years. And numbers of female angels have declined by 5.9% over the last 5 years, too.
All this adds up to a big problem for female-founded companies seeking investment.
Download a full copy of the report here.
Why we should be championing gender diversity in business
Aside from the obvious responsibility we have to support all forms of diversity in the workplace, there are some solid economic reasons for supporting women in business and female entrepreneurship.
mnAI’s report also revealed that the growth of female-led companies over the last five years significantly outstrips that of male-only companies.
What we can learn from Female Founders statistics
According to the Rose Review of Female Entrepreneurship (led by Alison Rose, CEO, NatWest Group PLC ) ‘up to £250 billion of new value could be added to the UK economy if women started and scaled new businesses at the same rate as UK men.’
Although the UK has a relatively female-friendly business landscape, just 1 in 3 entrepreneurs are female, despite a plethora of funding schemes over the last few years designed to attract and support female founders.
So why is there still such a gap between male and female start-ups when it comes to securing investment either from venture capital or government support schemes?
At mnAI, we recognised that part of the reason was a lack of data.
Until now, the process of finding gender data for UK companies was entirely manual, requiring countless hours of research to locate female-founded businesses and dig up information on them. We’ve changed all that, with machine learning algorithms that track the gender diversity of every UK company by director, officer and shareholder in real-time, with billions of data points covering over 7m UK companies.
How does being able to easily find data on female-founded companies help?
The ability to instantly find comprehensive gender data comes with a wealth of benefits for government agencies, investors, companies and educators:
1 ) Benefits of gender data for government agencies
For government bodies looking to actively identify and support female founders or businesses, mnAI’s proprietary disaggregated gender data instantly identifies all female-owned businesses across the UK.
This data can be searched by business sector down to company level – as well as by geographical area.
In the past, finding these female-led companies often required manual research, local awareness campaigns or time-consuming networking but with access to mnAI’s comprehensive data, government agencies can perform instant analysis to spot and monitor trends, activity and engagement. The data can highlight hotspots for female-founded companies, enabling Local Enterprise Partnerships (LEPs) to connect with female founders and start-ups, increase engagement and target funding where it is most needed. The same data can help local councils to allocate business grants under schemes designed to support female founders.
It’s a simple matter of using SIC codes or keyword searches to precisely target geographical areas, sectors or key verticals. From this, building and exporting female founder lists takes moments.
The mnAI platform is fully LEP approved and endorsed, and is being piloted by Catalyst South (an alliance of six LEPs) to identify, approach and engage with female-led businesses across the South of England.
“mnAI’s data allows us to identify businesses on our doorstep with great growth potential and reach out to them with information on grants, support, mentoring and events available through our Growth Hubs. It removes the unintentional barriers.”
Learn more about the mnAI and Catalyst South partnership
2 ) Use of gender data for investors – private equity, venture capitalists and corporate finance
According to a report by McKinsey, in 2020 women made up just 30% of senior leadership in public companies (and, incidentally, only 20% in private equity firms).
However, this article from ai.cio.com outlines just how challenging it has been to obtain gender data in some sectors – until now, because with mnAI access to gender data is now a matter of moments.
For example, mnAI’s data tells an interesting story for investors about female founded businesses in the South East of England. Using one of the range of filters available on mnAI, we filtered businesses in the South East by those that increased turnover by at least 20% over the last 5 years.
This data showed that businesses with a majority female board were more profitable, recording an average gross profit of £14.65m, over £10m more than those with non-female majority boards.
For investors and corporate financiers, access to easy-to-use graphic representations of data has numerous benefits, from allowing them to monitor diversity within their current investment portfolios, to seeking information for investments and acquisitions in female led businesses in specific areas, sectors or verticals, filtered by age, turnover or other variables, and to identify areas where women-owned business are either thriving or under-funded,
Find out more: https://www.mnai.tech/gender-diversity-technology
3 ) How gender data can help all companies
The Rose Review of Female Entrepreneurship has led to many more companies, both large and small, from banks to manufacturers, focusing on how they can help and offer more opportunities to female led businesses. mnAI’s comprehensive data enables this in several ways, for example enabling instant gender analysis of business customers and supply chains.
4 ) Gender data in education and research
Another important area where data on female founders and their businesses is invaluable is the education sector.
Most universities have engagement teams with a remit to find and broker relationships with businesses. It is a vital role, not only to ensure opportunities for students to gain vital work experience and build their professional networks during their studies, but also to help businesses innovate and grow through schemes such as Knowledge Transfer Partnerships (KTPs).
Gender data can be used in student dissertations and postgraduate research, to identify local female entrepreneurs for possible partnerships and to find female business role models to engage with students, thus encouraging the women business founders of the future.
How mnAI helps to promote female-founded businesses
mnAI’s award-winning, cutting-edge technology means that what has previously taken months of manual research can be converted into easily accessible visual data within minutes.
For example, our data can show you how many businesses with female-only directors were incorporated in the UK over the last 12 months, or break that down by geographical area if you are targeting businesses in, for example, the South East.
It can be used at a granular level to find a woman-owned business in a specific area (for example, in interior design), but can also track female directors’ networks and spheres of influence.
It is simple to filter businesses by time-frame, and find those which have significantly increased their turnover over a particular period.
The source of the most comprehensive UK company data, mnAI’s uniquely accessible insight and analysis across industries, sectors and geographies is a vital tool for enabling governments, investors, companies and educators to identify, support and promote female leadership and entrepreneurship.
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