Powering Diversity in the Growth Economy Backing women is driving the next wave of UK growth

Across the UK, women are launching businesses in record numbers - in 2023 alone, 164,000 new firms were founded by women, accounting for 18% of all new companies. What's more, nearly half (47%) of early-stage entrepreneurs in the UK are women. The stats are growing and they're compelling. The fact is, these ventures are transforming industries, creating jobs and rewriting what leadership looks like. But behind those success stories lies a persistent truth: female founders still receive only a fraction of the support and funding available to their male counterparts. The imbalance is holding back not just women, but the growth potential of the UK economy as a whole.

And yet when women do receive the right backing, the results can be transformative. Take Kids Planet, for example, born from one mother's desire for flexible childcare, it's grown into one of the UK's fastest-scaling nursery groups. It's a story that shows exactly what's possible when female entrepreneurship meets access to growth capital as well as targeted scale up support. The numbers say everything about the phenomenal success of Kids Planet: 235 nurseries, 7,000 employees and 36,500 children under its care. At the time of writing, those numbers were correct. However, such is the pace of growth at Kids Planet that they need updating on a regular basis.

While Kids Planet is an excellent example of female-powered growth, supported and accelerated by external investment, the need to build on the growing numbers of female entrepreneurs, create more balance and unlock greater potential in the UK business landscape remains a priority. The good news is, there is clear movement towards addressing the gender divide and the pot of funding being committed to support women in business is starting to fill up. So where is that money coming from?

Putting their money where their mouth is
Earlier this year, BGF announced a £3bn UK-wide commitment to support high-potential companies over the next five years. As part of this pledge, BGF is committing at least £300m to the Invest in Women Taskforce's funding pot, to support scaling female-powered businesses.

The IWT's 'Women Backing Women' fund, supported by Chancellor Rachel Reeves, has got some serious financial clout and demonstrates a shift in thinking. In fact, according to the IWT, if women started and scaled businesses at the same rate as men, it would deliver a potential £250bn boost to the UK economy. It's clear why the organisation is on a mission to create the world's largest investment pool for female-led and mixed businesses.

But it doesn't stop there. FFinc, an association dedicated to the financial, career and personal advancement of women, has already built year-long tech accelerators with KPMG, supported hundreds of women to grow businesses globally with HSBC, and helped 20% of its most recent accelerator cohort to secure funding. In September, the organisation launched its latest female-powered venture: the Forward Faster Accelerator – a comprehensive six-month programme designed to supercharge 100 of the UK's most ambitious female-founded businesses. Backed by BGF and a host of partners including HSBC, the aim is to move beyond traditional mentorship, to deliver capital access, commercial readiness and strategic scale support. The funding landscape for scaling female-led business is gathering pace, with a concerted effort from the investment community and wider stakeholders to support the growing number of businesses founded by women, building on the 164,000 started in 2023.

Being investment ready for when the time comes
There is clearly a growing appetite to invest, and there are countless female entrepreneurs waiting in the wings ready to supercharge their business. But, after years of underservice, how can they make the most of that relationship when the time comes? Regardless of whether a founder is male or female, securing investment for the next stage of a business' growth takes preparation. Few are investor-ready from the outset. The first step is to consider what investors look for in a business. Generally, it's a strong management team, good financial performance and a well-thought-out growth plan, among other things. Businesses typically seek investment to finance growth through expansion, which may include research and development into new propositions, hiring people, or to finance the costs of launching in a new market. Alternatively, the investment may be required to fund growth using a buy-and-build acquisition strategy. Whatever the driver, there are a number of key things to consider when preparing for investment:

Growth plans: Whatever a business' growth strategy, it should be underpinned by a detailed step-by-step plan, which should be supported by as much evidence as possible.
People: An investment is a relationship, and relationships depend upon people. A robust growth plan should identify the leadership, technical and professional skills of the top team. Investors must have confidence that a business has the right people to deliver their growth plan.
Credible financial plan: The due diligence stage of the investment process is crucial for determining success or failure. If financial accounts and supporting analysis are in the wrong format, insufficiently detailed, or in any way non-compliant with legislation, no one will want to invest.
The right investor: While the pool of investors with a specific female-focused remit is still in its infancy, there are many investors on the market willing to fund high-potential businesses. Some have specific expertise in market sectors, some are generalists, some are known for seeking returns in a short timeframe, others are more long-term in nature. Businesses should aim to engage with those that are a good fit for their business – alignment around goals is key.
Timing: If everything falls into place and is aligned, a small number of nimble and well-managed businesses are able to achieve investor-readiness in a few months. However, a timeframe of at least three to six months is more common, possibly up to 12 or more if a business has a lot of work to do.

More than money
The statistics tell us that the business landscape is changing in the UK and women are right at the centre driving that growth. However, there is still work to be done to create more inclusive entrepreneurship, and a more equitable, dynamic future for female-powered businesses. Capital alone isn't enough to drive growth. Networks, community and visibility for female business leaders are crucial.

Collectively, we need to do more to increase female representation on boards and nurture successful mentor-mentee relationships. It is a challenge that has been accepted and the time to power diversity in the growth economy is now.