Funding is out there for female founders

By Paola Cuneo, Head of Advisors and Investors, ELITE - LSEG  

Whatever your role in our industry, dealing with the impact of COVID-19 is likely to be dominating your thoughts right now*. But that doesn’t mean long-term business objectives can be forgotten. They still deserve all the attention we can give them.

That’s the way ELITE, London Stock Exchange Group’s support and capital raising platform for private companies, is approaching the current situation. And one goal we will always keep driving towards – as we have underlined by signing HM Treasury’s Investing in Women Code – is more investment funding for female-led businesses.

How to secure such funding was going to be the subject of a panel event we had planned to hold jointly with NatWest. The event is being rescheduled for later in the year but in the meantime, I want to pass on some insights that came out of conversations I had with two of the intended panellists.  

Founders first

Alex Pitt is Co-founder of venture capital firm Mustard Seed, which invests in early-stage businesses offering both financial and social returns. Companies with at least one female founder make up 42% of Mustard Seed’s portfolio – a much higher proportion than the UK average.  

For Alex, the most important factor in any investment decision, is the calibre of the founders. And although he doesn’t actively seek out female-led businesses, he is often impressed by their inclusive nature and the lack of overblown sales talk in their presentations. “The best advice I can give any female founder,” he says, “is to be yourself. We certainly prefer an open, straightforward attitude – and if any investor doesn’t, you’re likely to be better off without them.”

Alex feels that an increase in female investors will, over time, direct more funds to female founders. The proportion is already growing, albeit slowly, and Mustard Seed are one of several firms keen to support the change.

Persistence pays

Alex also advises female founders to profit from knowledge sharing wherever they can – and this is echoed by Sharon Pursey, Co-founder of cyber-safety firm SafeToNet, which has raised £23 million of funding. Sharon highlights the value of female business role models and believes you should follow every lead, from finding mentors to attending every event, in order to emulate them. “Don’t be shy about asking other companies in your field for introductions to their investors,” she urges.

She also emphasises that securing funding must be a collaborative effort, as investors look at a company’s wider team. That is certainly my view as well – and based on my experience with ELITE and as an ambassador for Everywoman, I’d like to offer female founders some thoughts of my own.

First, choose the right kind of funding. Venture capital, for instance, is for potentially high-growth businesses; if that isn’t your company, look elsewhere. However, if you do opt for VC, seek out a match for your business’s sector, size and type. Funds invest in a tiny percentage of the business plans they see, so don’t waste any opportunity to optimise your chances.

Finally, however hard it seems, keep trying. It’s great to see the pipeline of female-led businesses growing, and we need the growth to continue. If you have confidence in your plan and are prepared to learn and be persistent, firms will want to hear from you.

*On 23 March ELITE launched a new initiative, #ELITEtogether, aimed at offering practical support to all parts of its community in addressing the effects of COVID-19.