On January 31st, the introduction of new financial rulings is set to reshape the landscape for High Net Worth (HNW) investors, raising the bar significantly. Under the revised criteria, individuals will be required to earn a minimum of £170,000 or possess non-pension, non-home-related wealth amounting to £430,000 to qualify as HNW investors.

This substantial increase from the previous thresholds of £100,000 and £250,000 respectively is poised to have far-reaching consequences, particularly impacting the ability of women to invest in businesses.

The Gender Disparity

The crux of the issue lies in the fact that the new rulings are set to exclude a staggering 69% of potential female investors. This exclusion is not merely a statistical anomaly; it is a blow to the broader goal of fostering gender equality in entrepreneurship and investment.

Impact on Female-Led Ventures

Why does this matter? It matters because women, statistically, invest more in businesses founded by their female counterparts. With less than 2% of venture capital funds currently being directed towards female-founded enterprises, the new financial criteria further exacerbate the already existing gender gap in investment opportunities.

Underfunded Sectors

One of the sectors hit hardest by this shift is women’s health and technology — an area where female entrepreneurs are actively contributing to innovation and growth. Unfortunately, this sector is already underfunded, under-researched, and lacking the support it deserves. The new rulings threaten to stifle the growth potential of businesses focusing on women’s health and technology, limiting their ability to flourish and make a meaningful impact.

Economic Consequences

The ramifications extend beyond individual entrepreneurs. Fewer women investing means fewer women-funded businesses, resulting in diminished economic contributions. Successful businesses, led by women, play a crucial role in employment, tax contributions, and overall economic vitality. The new financial criteria risk undermining these contributions and perpetuating an environment skewed against female founders.

A Call to Action

In the pursuit of entrepreneurship, equality, fairness, success, innovation, and women’s health, it is imperative to reconsider these restrictive financial criteria. A collective call for a 6-12 month extension to allow for further consultation on the implications of these new rules is crucial. This extension will provide an opportunity for stakeholders to evaluate the disproportionate impact on women and devise more inclusive and equitable solutions.

As we stand on the brink of these new financial rulings, it is crucial to recognise their potential ramifications on the gender dynamics of investment and entrepreneurship. By advocating for an extension and a more comprehensive consultation process, we can strive towards creating an environment that nurtures diversity, innovation, and equal opportunities for all.

We are calling on every woman in business to help rally the government to review the legislation – Please sign the petition here

You can also read the open letter to the government from the Startup C*alition and add your signature here.