Virgin StartUp warns that progress made in closing the gender funding gap is at risk
- Virgin StartUp pledged last year to fund men and women founders equally by the end of 2020.
- Earlier this year the not-for-profit was seeing 43% of funding applications coming from women founders looking to start and scale their businesses. In the last week before lockdown this rose to a peak of 47%.
- The first six weeks of lockdown, however, saw this drop as low as 23% – representing the lowest proportion and the largest gender gap in the not-for-profit’s six-year history
- While numbers of applications from men also decreased over the same period, the decline was not nearly as dramatic as it was for women
- These findings follow on from recent research by the Institute for Fiscal Studies (IFS) and University College London (UCL) which shows that in homes with a working mother and father, women have been taking on the lion’s share of childcare and chores during lockdown
- Virgin StartUp, which has distributed £17.9m of funding to over 1,447 female founders since 2013, has been pivoting its services to the small business community to help them address the impact of Covid-19 with specialist support available via www.virginstartup.org/start-uploans
London, 22 June 2020: Virgin StartUp has today reported that funding applications from women entrepreneurs have been disproportionately affected by the Covid-19 lockdown.
Prior to the global pandemic, the not-for-profit which launched a 50/50 gender funding pledge last August, was seeing 43% of all applications coming from women founders. Immediately prior to lockdown this had reached a peak of 47% however, over the next six weeks, this dropped as low as 23%. This is particularly important because figures show that the funding gap, at least in Virgin StartUp’s case, directly correlates to the gap in applications.
Applications for startup funding from men also decreased during the first six weeks of lockdown with numbers dropping to 278, compared to 337 in the six weeks immediately preceding lockdown (a 17.5% decline). This decline was, however, significantly less pronounced than that for women whose application numbers dropped from 215 in the six weeks prior, to 112 over the course of the first six weeks of lockdown (a 47.8% drop). These recent rates of applications from women are the lowest Virgin StartUp has seen in its entire sixyear history. Last year’s pledge was launched in response to the not-for-profit beginning to observe a decline in applications from women which was impacting the gender funding gap. The six months leading up to the August launch had seen an average dip to 36% which, while still considerably higher than the national average of 20%, was a real concern. The Pledge was launched to both address this and to put the focus on continual improvement.
These findings from Virgin StartUp come hot on the heels of research from the Institute for Fiscal Studies (IFS) and University College London (UCL)*. Having interviewed 3,500 families across the UK, the study shows that in homes with a working mother and father, women appear to have been doing more of the childcare and chores during lockdown. The survey showed that for every three hours of uninterrupted work managed by dads, mums were only managing one. These insights provide a very strong rationale for why entrepreneurship ambitions among women may have been put on hold in recent months.
Sam Smethers, Chief Executive of the Fawcett Society said: “We know that women are being hit harder than men in terms of the economic impact of the Covid crisis and they are much more likely to be doing the majority of unpaid care work and carrying the emotional burden too.
“This new Virgin StartUp data suggests that female entrepreneurs are currently much less likely than men to be pursuing business start-up funding. It may be because they are being more cautious or more pessimistic than men, or because they just don’t have the capacity because they have taken on additional homeschooling and childcare responsibilities. Whatever the reason, if we are holding women back, we are holding the economy back and that is bad news for the UK recovery.”
The team at Virgin StartUp – led by Managing Director, Andy Fishburn and Chairwoman, Linda Grant – is therefore determined to double down on tackling the barriers to starting and scaling a business, faced by women in particular, which appear to have been magnified by lockdown.
With this in mind, the not-for-profit, has been offering specialist support to founders looking to start and scale a business during the Covid-19 crisis and to help reignite UK entrepreneurship.
Virgin StartUp managing director, Andy Fishburn said: “We are just as committed today as we were last August to working with women founders to strive for funding equality and to provide the support, guidance and mentoring services needed to make this sustainable. We are, all of us, currently operating under the most extraordinary circumstances, and we will endeavour to continue to be a valuable resource for all of the founders in our community, leaving nobody behind in the process.”
Women-founded businesses supported by Virgin StartUp have a 76% survival rate (73% for founders who are men) and are still trading after three years, surpassing the national average of 54%.
To apply for a Start Up Loan of between £500 and £25,000 visit www.virginstartup.org/start-up-loans
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