Welcome to today’s session of the Business and Trade Select Committee as we conclude our hearings into access to finance in this country. I am delighted that we are kicking off today’s session with a panel that is focused on, in particular, the extraordinary gaps between investing in the wider economy and investing in women-backed businesses.

I have a question for each of you. What has your personal experience been of seeking investment for your businesses in the UK?

Thank you for having me. My background is that I am a three-time exited entrepreneur and the co-chair of the Invest in Women Taskforce. I started my first business 26 years ago, and the sad statistics are that the environment for women entrepreneurs raising capital in the UK has got worse, not better. We need to be aware of that. While the statistics are that about a fifth of SMEs—

Debbie, we are going to go into this in tons of detail, but help us set the stage first. Give us a sense of your personal journey through this.

It is pretty dire, and we need to be clear on how dire it is. Before we get into the detail, I would say that the single biggest reason for my business success is that I am really good at asking men for money, because if I was not good at asking men for money, I would not have had a career. The job of female entrepreneurs is tricky because our lives are spent pitching to men for capital, and the UK is particularly bad, on any global stage, at backing female entrepreneurs.

My name is Jordan Dargue. I am the co-founder of an organisation called Lifted Ventures. Some of the really fundamental challenges for women looking to raise investment, specifically when thinking about regional activity as well, are down to the lack of funding ecosystems available. We need more representation of women operating in funding ecosystems. In addition to that, funding products are not particularly set up for women-led businesses. When we think about some of the sectors and industries that are being backed by venture capital, they are not often aligned to women-led sectors and industries. There are some big, fundamental barriers that we need to break down from a high-level perspective before we can start to see more equity in investment flowing into female-led businesses.

I am Debra McDonald. I am the CEO of a small chemical company based in Dudley in the Black Country. We make eco-cleaning products for the consumer and wholesale markets. We private-label about 80%. I spend a lot of time with brand founders who are looking to start their own brands too. We went on a significant journey over 18 months to try to get some funding for our growth plan. As both of the lovely ladies here have told you, the majority of the men that we are pitching to are looking for tech, fintech, and very high-exit-type businesses. I think they look on a lot of women-led businesses as lifestyle businesses. I have actually pitched to Jordan; she is one of only two women over 18 months who I pitched to, if that gives you some context.

Is your perception that, if it is a female product, or a product or service specifically for a female audience, male investors are generally just not that interested? Is that the general message coming through here?

The data shows that a female investor is twice as likely to back a female entrepreneur as a male investor is. That is not necessarily about egregious sexism. I have tended to raise my money. I have grown big businesses from venture capital and private equity. Male investors are taught to pattern-match. They are returns-driven. The irony of all of this is that women-led businesses deliver 35% better returns than male-led businesses. Forums such as this and the taskforce that I co-chair for the Chancellor are really important to land the message that DE&I, if that is what we are going to call it, is about performance. It is not just about purpose. It is fortunate that the two things align. Yes, I think you are right. Some 80% of female entrepreneurs found businesses that speak to the female experience. One of the businesses that I chair is called The Better Menopause. Despite my track record of three exits, pitching to a room full of men about the 48 menopause symptoms, of which hot flushes are the most printable, is not always straightforward. The feedback that I had in that room was, “This is great and you are great, but isn’t the business a bit niche?”

It is 51% of the population.

Yes, so not really. We have to appreciate that we do not always look, feel and sound like the businesses that they are used to backing, and yet the UK has turned out some incredible female success stories. We just do not talk enough about them because they are not always high-growth tech businesses. They are often consumer businesses. We need more female investors because they are more likely to back female entrepreneurs.

It is a great question. The myth that I want to bust is that women are not doing this and that there are not enough women to back. That is just not the case. Government data shows that about a fifth of SMEs are female-led, and roughly the same proportion are what we would class as high-growth enterprises—businesses that are capital‑ready. That is 20%, and yet the amount of capital in 2024 that went to back a female-led business in the UK was at 2%. It is not that we are not starting; it is that we just do not get through the funnel to investment, despite the fact that we deliver outsized returns. My argument, as you can see with conversations like this and my taskforce work, is that there is not a pipeline problem. We need to knock that on the head. There are access and investment committee problems. The same dataset demonstrated last year, by the way, that 88p in the pound of capital invested went to back a business with no woman in the cap table, i.e. no equity or financial upside in female hands. A big part of the work that we need to do is to speak to rooms full of men. I spend a lot of my life speaking to rooms full of women, which is fantastic and exciting, but we need male allies; we need male investors, but the most important thing we need is male founders of businesses to look around them and to recognise that there are brilliant women with whom they need to co-found businesses, because the real opportunity is also to drive mixed teams. That is how we can break through the pipeline problem.

I will come at it from a different angle. Lifted Ventures exists to increase the flow of capital into female founders. Right at the core of our organisation is an active angel network, which is a women-led angel network. I am going to come at it from an early stage. Quite often, when you have women backing women and putting that first cheque into organisations, those women then have an entry that allows them to go and try to seek follow-on funding. It goes back to Debbie’s point about access. There becomes a real barrier at that entry point if we do not have enough early‑stage capital, because businesses trying to seek capital at that early stage to be able to develop high-growth potential businesses need a fundamental amount of capital to get to a point of being self-sufficient. That is where angel investors come into this mix. What is really necessary is for the Government to start to think about what could be deployed alongside angel investment to give an entry into that opportunity to be a high-growth business, and to seek follow-on funding from venture capitalists, institutions and other types of products as well. That is where we see a really heavy challenge for female founders. Specifically, if we see more women backing female founders, we can grow additional pools of wealth as well. This is about making our economy wealthy. It is all about returns. It is all about growth. If we can start at the bottom, you will start to see the increasing funnel, and you will start to see the amount of funding being able to build and deploy into the businesses as they grow in scale and go through the stages of funding that they need to.

It is terrible. If the stats are bad for women, which they are—that is why we are here today and why I am co-chairing the taskforce—then they are atrocious for women of colour and women with disabilities. That is because networks and access to initial sums of capital really matter. Layered across all of this is a huge class issue. It is super hard to get a business off the ground if you do not have that network, particularly if you are looking at a high-growth business that requires capital. I work a lot between here and the US. The crown jewels for UK plc that Americans are envious of are SEIS and EIS. They are Tony Blair inventions, I believe, and in all of my businesses they have been the fundamental way that I have got things going. The Budget last week upped the ceiling on EIS, and looked at VCTs and EMI schemes. The Government are doing a lot of work to think about how we make the UK attractive for entrepreneurs. SEIS was increased to £250,000 a couple of years ago, but if you do not have an address book, how are you finding that first £250,000 to back your business? Networks matter. The gender pay gap begets the gender wealth gap. Women just do not have as much money, but one of my points for awareness is around getting more people and more women to angel invest in the UK. This is music to your ears, I know. Only 14% of angel investors are female. If there is a message for today, it is that you do not have to be Warren Buffett to invest. You can invest small cheques to back businesses that you are excited about in a tax-efficient way. If you invest in a high-growth business that is SEIS-qualifying, you get a 50% immediate tax return if you are a higher-rate taxpayer, and you get your downside protected, but that is still a niche within a niche within a niche. You are talking to higher-rate taxpayers who have disposable income. The work of Innovate UK and other Government organisations focused more outside of London is important to help diverse women found businesses. Finally, as ever, we just do not have enough role models. I am from an immigrant family to the UK. The women in my family ran businesses. The businesses were super humble and they had tons of children, but that is what I grew up seeing, so I have never had a doubt in my mind that it is possible. That is not the case for many communities. They do not know anyone who is doing it and they do not have role models to look up to. It is about a combination of access to capital, wealth creation and banging the drum about EIS and SEIS. The other data point there is that, if you look at businesses registering for those forms of tax relief, there are so many female entrepreneurs who do not know about it. They just do not know. The awareness outside of this postcode and a few others about the art of the possible is important. We are a nation of shopkeepers. We have to land that we are still open for entrepreneurs, and that entrepreneurship for women is a great career option that is going to make them rich.

I am absolutely not native to Dudley, but I feel as if they have wrapped their arms around me. I went in swinging. Like I said, I work with some early-stage founders. Your previous question links in with this. Unconscious bias exists right across the early stage, people looking for their initial growth funding, maybe beyond seed funding, and then for that hypergrowth that they need. It exists right across institutional funding. I went round the houses, so to speak. I tried Government loans and the SMB grants. For one reason or another, we did not tick the box on eligibility. We were a little bit too old for EIS, and that really hampered my crowdfunding and my ability to get angel investment, even though I pitched plenty. I am working with a young black founder right now, and because I knew I was coming here, I asked her about her story and how she funded starting her business. She scaled a cleaning business. She does household, domestic and commercial cleaning. She went to her local network for support, and she was told that it would be easier for her just to fund it herself. The equipment she needed was minimal. She now has 190 clients, and she has come to us to start a new consumer brand. These women are tenacious. I know another founder. She does not mind me mentioning her name. Her name is Amy Knight. She is CEO of a women-led business called Must Have Ideas. She started at her kitchen table. This goes back to your point, Jordan, about how much money we are leaving on the table here. They were self-funded, with £1,000 from each of the founders. Seven years later, she is moving into a 250-square-foot new premises in Kent, and they have taken £65 million revenue per year in seven years. Sorry, I am getting passionate now. They sell household items. They sell small retail hacks. It is not sexy. It is not fintech. It is not AI. It is just good old-fashioned retail and e-commerce. They have done it all themselves because they were not eligible for funding.

Thank you so much for setting the scene because that has been really helpful, as is the fact that we are able to have more of a conversation at the moment about those priorities. What are some of the positive things that you are seeing at the grassroots? What are those shoots that are going to help women-led businesses to thrive? What are those examples? Can you give us some of those? Debra, would you like to start? You have just given us a story. You might have something that they managed to get access to, or something they did not access but that now exists, perhaps, that they wish they had.

I have to give credit to the local services that we have in Dudley and the Black Country. I believe that Dudley Business First is mirrored around the country. It has been fantastic. If you want it, it will give you free PR. I will turn up to the opening of a crisp packet if I can get my business’s name out there. I have been on innovation workshops. I have been on funding courses to help me to be investment-ready. The green shoots of helping businesses are there, but it is about education. Not everyone is aware that this is available for them. I speak to people daily in small businesses and tell them to reach out. I think their perception is that help is not there, and that it is back to the 1980s with start-up grants. I try to educate that it is not just about the free money. There is not an endless pool of money, but there is a lot of free business support. There are real green shoots in the different communities that I see.

Jordan, what is the best practice you have seen? What would you like to see brought to more prominence for people?

I mentioned a little bit of this. I touched on it in my first answer, but we need more co-investment at each stage of the journey. The only way that we catalyse and grow our own personal networks of investors to invest in businesses is by Government, LPs, GPs, and pension funds supporting and putting their money, pound for pound, against private investors. That will have a fundamental impact on more women investing, and more men backing women as well. There was a programme that we were involved in at a very early stage called the regional angel investment accelerator programme, which was developed by Innovate UK. I was one of the women who was involved in that programme in a pilot capacity. We were given £1 million of grant funding from Innovate UK to invest alongside early-stage organisations. We were able to build out two new angel networks in the northern regions. There were more than 50 investors in those networks. They had £1 million to deploy against their own investment, which leveraged a four-times return on us being able to put money against that £1 million. That was £4 million into a regional ecosystem, with £1 million from Government. That was absolutely fundamental in catalysing and building out more early-stage capital. For me, that is a fantastic green shoot and we need to see more of that happening.

Jordan, some of the evidence that we have taken on the Committee shows that venture capital is not spread evenly across the funding life cycle. There is a real concentration at buyout stage. Are there any particular stages of the funding life cycle where you think it is especially problematic for women founders to raise money, or is it a problem that just bedevils the whole process?

Yes, absolutely. We have seen that businesses that have had that early-stage, pre-seed seed funding through angel investors often go on to successfully raise VC funding, although not at the level it should be at. There is more that needs to be done in that area, but often, if women are sat within that cap table and they have invested in female-led businesses, you see a real flurry in growth and impact. Going back to Debbie’s point, it is about putting role models, mentors, and great advisers around those businesses through angel investors. Then businesses are likely to be more successful in raising follow-on funding or quickly becoming self-sustaining. For every pound invested in a pre-seed seed organisation or in women-led businesses, the data shows that women are more likely to generate twice as much revenue for every pound invested. That is where I see a real gap. If we can fill that gap, we are giving founders a step up. They have a step up that gives them more opportunity to be able to go on and raise venture capital funding. Going back to Debbie’s point about understanding the businesses, we also need to have more women at the doors of those VCs. That will make a fundamental impact on our nation.

Debbie, if you wanted to add anything there, please do, and then I want to come back and ask about the role of public finance institutions, which we are starting to touch on.

The answer to your question, Chair, is that it is a problem at every stage. In my role as co-chair of the Invest in Women Taskforce, I have been focused on venture capital and later-stage investment. I have been singularly focused on that because of these stats. £15 billion of equity is up for grabs every year in the UK. When we launched the Invest in Women Taskforce, which was one year ago today, we set an initial funding target of £250 million, which seemed insane and exhausting. Today we are announcing that we have hit £635 million. That seems like a massive number that makes me feel tired thinking about it, but it is a drop in the ocean. It is £635 million, over a two-year period, relative to £15 billion a year of equity investment. If you do the fag packet maths on that, we are 10 years away, if we continue to raise commitments at this rate, from parity. We are just not at the table, and I want us to be super clear on that. We have beaten our original target. That has been from scratch. We were not backed with Government funds. We are super grateful to the Chancellor for her support and for championing this initiative, but no money was given to this initiative. This is just hard yards and shaking the tin with the institutions that are the founding backers of this. What do we need to do? We need to crowd in private capital as a nation. The wind beneath our wings at the earlier stage was SEIS and EIS, which I benefited from in all of the businesses that I have founded. I am a prolific investor and I only back women, because you have to put your money where your mouth is. The other interesting thing in terms of a moment in history is pension fund reform. That is a mega opportunity. If you look at the backers of the Invest in Women Taskforce and the announcement that we are making with the Chancellor this evening, we have announced that Nationwide and British Business Bank have come in, alongside pension funds such as L&G and other backers of this initiative, to crowd in this capital. British Business Bank, which we can potentially get on to, has an enormous role to play. That is a massive asset, but it has to crowd in the private capital. Pension fund reform is really interesting because of the work done through the Mansion House accord and the Mansion House compact, and what is now being referred to as the Sterling 20. That really matters, because, as a nation, we are crap at backing ourselves with our own institutional capital compared with the US, Canada or Australia. As we think about how we can do that better and how our pension fund money, managed in the UK, can back private companies in the UK, we must not forget the gender and diversity lens to that, which is about performance. It is not about DE&I. It is about this being a massive opportunity for the UK to differentiate itself. This exhausting £635 million is the first of its kind in the world. It has been really hard work, but we have only just got going. We need to remember how far we have to go to reach parity for female-led businesses, pan-UK and in all of their diversity. There is still absolutely a massive south-east cluster around this. The secret to it lies with the UK unlocking institutional assets and really deploying British Business Bank capital to ensure that we are putting our money where our mouth is. A final point on that is around investment committees. Investment committees are not gender-diverse in the UK. We need big institutions to start role modelling behaviour across the board because, to this point, a female investor is twice as likely to back a female entrepreneur. If you are going to IC, or if a particular investment opportunity is being pitched at IC to a room full of men, there needs to be more diversity in the mix. Those are green shoots and institutional reasons to be cheerful.

That is very helpful. I have one more point on either the British Business Bank or any other institution that you have had some experience of. It has increased its target for equity finance for female entrepreneurs from 2% to 10%. Obviously, that feels like quite a lot, but it is not that much, is it?

I am happy for now.

You are happy for now. That is good. I guess the point is that there is movement, but perhaps we would like to see some much more ambitious targets. I just wondered if you had any thoughts on that. The current target is by 2030, so even that is a bit snail’s pace.

I agree. The BBB has committed £100 million to the taskforce as a partner, and £30 million to the fund of funds. The fund of funds is complex, but I can do it in about 30 seconds. It is a fund of funds, because the way to drive systemic change is to put more money in the hands of female investors and to get them to back female entrepreneurs. Otherwise, you are doing it piecemeal. That is £130 million in the fund of funds. We are grateful to BBB for its support. It has also launched something called the investor pathways capital initiative, supporting more early-stage investors, with at least 50% of that money going to female fund managers. I would like to see more. I would like to see more money. I would like to see gender commitments across the board. All public money should be allocated out of an awareness of gender balance, for every fund and every pot of money. We should be able to see where it is going and how it is acting as a role model to others. It is a huge asset. It is an SME bank. I am thankful, but I am always a bit of a thorn in its side, I suspect, because we need to keep pushing it. What gets measured gets changed. We know that, and the real accomplishment in the last couple of years of co-chairing this taskforce has been pushing everybody to report, because when we see it, we know what we can ask for.

I have contributed to the ten-minute rule Bill that Sonia has presented in Parliament. Structural reform is needed in the UK at local government and central Government level. The basic stats frustrate me. Some 20% of businesses are majority-owned by women. We are talking about less than 2% of VC funding, but the majority of women-led businesses that I talk to are not in that bracket. They are not looking for venture capital funding. They do not have a 10x exit plan. They are saying, “I need to make money. I want a business. I want a lifestyle business,” or, “I want something that is going to create generational wealth for my family.” They are not looking to exit. We need a deeper understanding at a local level from business support services that are already there. It is difficult. As I said, I looked for funding for about 18 months, and I actually found an angel investor. It was not from any of the people that I had pitched to. I had no institutional funding, no local grants or anything like that. It was a local businessman who had exited his own business. He is self-made, and he loved what we did. They say that people invest in people if they like the mission and believe in what they do. That is the type of funding that I got. How do we tap into that? I would really like to see us looking not only at institutional funding; I would like to see business getting involved in helping young and female entrepreneurs. This goes way back to the education system. I do not want to go off-piste, but entrepreneurship as a fundamental should be taught in schools.

Yes, absolutely. The mayoral committees have such power to change what is happening in the regions. When we look across the regions, we can see that some mayors are doing a fantastic job in making sure that a lot of their strategy is aligned to underrepresented entrepreneurs. However, there are still many regions that are doing the same things year in, year out, and also commissioning the same business support companies in their regions. If that is not changed, we are not going to change and move the dial in any way, shape or form here. It is really important that we continue to lobby, certainly within the regional mayoral committees, around how they can change and evolve. The messaging needs to filter through because, no matter what is put in at a policy and strategic level, it still needs to be on the ground level where we make a real difference. When you see women who are acting as mayors, they see the real challenges of female founders. That is where we need to make a really fundamental difference. The data side is really important. That provides transparency, but the biggest thing it provides is accountability. If the data tells us something is not working, you can pinpoint where it is not working and you can make a valid change. My real lobby as part of this conversation is that we must have better data-driven reporting. Look at some of the statistics that we are using, such as the £250 billion that could be added to the UK economy if women-led businesses were scaled at the same rate. That report is nearly six years old. Let us get some really good new data. Let us get some great tracking, because that will really help regional and mayoral committees, and it will certainly help us on the ground in the delivery of that as well.

I am all about money. We have raised £635 million over 18 months, but all of that has been national funding access. Where can mayors help? Where can we look at really joining up that initiative regionally? It is because they are controlling regional pension pots. That would be my ask: more money, please.

Thank you. Congratulations on hitting the milestone that you have hit today. That is an extraordinary achievement. As you say, the evidence that you have laid out today helps us recommend where we need to go next. That concludes this panel.