The State of the Gender Funding Hole in 2024 

Following information that the gender pay hole has diminished to its lowest degree but within the UK, new knowledge from Startups suggests the same, modest development within the realm of enterprise capital funding.

The gender funding hole, a persistent hurdle for ladies entrepreneurs, has narrowed for the second 12 months in a row, providing a glimmer of progress for female-owned companies.

Whereas the enjoying discipline stays removed from degree – male-founded startups nonetheless safe a median of almost six occasions extra funding – the information demonstrates a big shift since 2022, when common funding was virtually seven occasions better for males.

Early-stage funding for ladies is rising at a a lot quicker fee year-on-year, pushed largely by an increase within the variety of angel buyers backing girls entrepreneurs.

State of gender funding in 2024

Utilizing knowledge from this 12 months’s Startups 100 Index, we in contrast the quantity of early-stage pre-seed and collection funding gained by male- and female-owned startups of their first 5 years of operation.

Our outcomes present that, on common, female-founded companies now obtain £1.05m in funding, in comparison with £6.2 million for a solely male-owned organisation.

The disparity implies that males will get, on common, 5.9x the quantity of early-stage VC funding that girls will.

In step with earlier findings, the addition of no less than one male founder pushes the common quantity of funding obtained as much as £4.12m in 2024, suggesting {that a} male associate remains to be required for feminine founders to safe early-stage funding.

Constructive progress

This 12 months’s report is the third in a collection on the gender funding hole run by the Startups workforce. Whereas the 2024 outcomes present a transparent inequality between the sum of money women and men enterprise house owners can increase, year-on-year evaluation tells a extra optimistic narrative.

During the last two years, women-owned companies have elevated their common funding by a staggering 64.4%, from simply £644,000 in 2022 to over £1m this 12 months; in a continuation of a constructive development for feminine entrepreneur funding.

Male-owned companies additionally grew their common funding pot by 31.9%; a powerful achievement given in the present day’s troubling fundraising panorama.

In a latest survey, one in ten corporations informed Startups that entry to capital was their predominant concern in 2024, making it a high problem for small companies.

Angel funding important for ladies entrepreneurs

Angel funding continues to be a much-relied upon funding supply for ladies. Our knowledge exhibits that 46% of female-led corporations within the Startups 100 had been funded by angel buyers,  the same proportion to the quantity of male-led (48%).

An absence of feminine decision-makers within the funding group has beforehand stalled progress for bridging the gender funding hole. In accordance with the 2023 Alison Rose Evaluation of Feminine Entrepreneurship, 14% of angel buyers within the UK are girls.

Nevertheless, the Rose Evaluation additionally exhibits that this minority determine has been instrumental in contributing £2.34 billion in direction of feminine entrepreneurs since 2012.

Authorities motion almost curtailed progress this 12 months. In January, new legal guidelines got here into power that raised the earnings threshold for an individual to qualify for angel standing to £170k a 12 months.

Critics argued that the change would block girls, who usually earn much less, from changing into angel buyers and restrict entry to funding for women-owned startups. In mild of the backlash, the coverage was rolled again in March.

Gender pay hole

Our findings observe authorities studies that the UK gender pay hole has shrunk to its lowest level since corporations have been mandated to report it in 2017.

The information stays a blended bag. Whereas girls now earn a median of 91 pence for each £1 earned by a person, the disparity is much from erased.

In sure giant corporations, the problem is very stark. At EasyJet Airline Firm, for instance, final 12 months girls’s median wage was solely 36p for each £1 earned by a person.

Public sector pay additionally exhibits a gender divide. Right here, 87.6% organisations pay males greater than girls, in comparison with simply over three-quarters of personal corporations – a incontrovertible fact that led to a variety of equal pay strikes at Scottish councils this week.

Regardless of these challenges, the mixed knowledge from the federal government and Startups presents a cautiously optimistic outlook. It suggests a possible shift in direction of a extra equitable panorama for ladies in enterprise, each by way of pay and entry to funding.