Women are more likely to give up a larger portion of their business than men to secure investment, according to a report from JP Morgan Private Bank.
The top 200 female-powered businesses report uses Beauhurst data to analyse more than 10,000 high-growth companies in the UK that are founded, led, owned or managed by women. The top 200 companies are then ranked based on valuation, headcount and growth in sales.
Now in its second year, the report notes that female-led UK businesses attracted record equity investments in 2021 to the sum of £5.05 billion ($6.34 billion).
However, despite this female founders were also found to be more vulnerable when it came to giving up a percentage of their business for investment. The rate at which women own less of their companies as equity investment increases is almost twice that of men—a 24.8% reduction compared to 13.3% – according to the report.
Charlotte Bobroff, senior advisor to female entrepreneurs across the UK at JP Morgan Private Bank, said: “The data shows us that when female founders do raise equity, they give up a larger percentage of their ownership than male founders.”
“In fact, the rate at which women own less of their companies as equity investments increase is almost twice that of men, a 25% reduction compared to 13%. This reflects several dynamics affecting female powered businesses, including a more challenging fundraising landscape and a lack of resources, exacerbating the effect of equity financing,” she added.
Of the businesses analysed, female-led companies excelled in industries such as clothing, shops, healthcare and e-commerce. The largest number of female-powered businesses in emerging sectors included those working in artificial intelligence, fintech and educational technology.
Skincare brand Trinny London topped the rankings list of the top 200 fastest growing female-led businesses, followed by website VogaCloset, employment solutions provider RMS and banking app Starling
In the report, Trinny Woodall Founder and Chief Executive Officer, Trinny London, said: “The VC community needs more female representation and when you are pitching to a room full of investors, I believe 50% them should be women.”
“Trinny London is not just female-founded, but the company is 85% female too. The dynamic of the people and personalities is key in a business that is made up of majority women. Going back to hiring, irrespective of gender it has been important to make sure different styles and personalities shine through.”
Woodall added: “From a funding perspective, 2% of businesses founded by women are funded. There have been countless times when I am pitching to a room full of investors and there is not one female individual within the room.
“How can you connect with a female founder, a female-focused business and client base if you aren’t the consumer?”