women-in-finance-Jessica Jackson, Investment Director at GC Angels, offers advice to female founders seeking funding to grow their business and stresses the importance of understanding the options that are available.

Raising investment for the first time can feel daunting. For many, securing finance, be it through debt or equity, is completely new and it can be difficult to understand the options, let alone make a call about which is best for your business and its needs.

The Alison Rose Review highlighted that awareness of, as well as access to funding are the two most common issues faced by female entrepreneurs, whether running a start-up or an established company. It also reports that female-led businesses receive less funding than those headed by men at every stage of their journey – but why is this? The report argues that women typically have higher risk-awareness compared to their male counterparts and are more cautious considering financial products. Women typically don’t have the same professional networks that male entrepreneurs benefit from, and are therefore less likely to know other entrepreneurs or to have access to individuals and organisations that are in a position to support them as they navigate the complex finance landscape.

Although the review states that it is difficult for female founders to find the right support in accessing finance, it’s important to know that there are a plethora of organisations and networks working cohesively to advise female founders. One such example is The Knowledge Transfer Network. Part of Innovate UK, they are actively working to support female business owners through its Women in Innovation programme. The network consists of universities, funders and investors who facilitate idea sharing, and encourage founders to embrace opportunities to innovate and scale to the next level.

Whilst it’s advisable to tap into any networks or organisations, the first point of call should be to gain an understanding of the different types of finance and which situations they are best suited for. This will help you make your own financial decisions and provide clarity on what you should be seeking.

Debt finance

This type of funding works in the same way as debt in everyday life – if you want something immediately but don’t have the required funds, you can take out a loan and pay it back later. In business, that funding could make a huge difference in striking a deal with a major supplier when you need to scale up on your stock levels for example. Debt is a great option: it’s quick access to finance which can increase working capital, allowing you to invest in growth. The downside is that the loan will accrue more interest the longer it takes to pay off, but hopefully the benefits of being able to grow your business quicker will far outweigh the costs of taking out the loan.

A good example of this is YourZooki, a premium liquid supplements brand our Debt team at GC Business Finance has worked with recently. The firm took out a £150k loan in February this year in order to invest in a new warehouse and create four new jobs. This was followed up with a second £150k loan in June, after the company had doubled its turnover in just four months, which has allowed it to increase its stock levels to cope with unprecedented customer demand.

Grant funding

Unlike a loan, grant funding does not require repayment. This type of finance is often overlooked by entrepreneurs as it can sound too good to be true, but it’s definitely worth checking your eligibility for business support. The Government website offers a useful tool to help business owners identify the various different grant schemes, which can be filtered by region and sector. It’s also worth discussing your options with your Local Enterprise Partnership or Growth Hub – you can find yours via the LEP Network.

An institution we work closely with is Innovate UK, which provides government grants to helps businesses “develop and realise the potential of new ideas, including those from the UK’s world-class research base”. This year, Marion Surgical, a company building a next generation suite of surgical simulators through virtual reality, received backing from Innovate UK alongside an investment from GC Angels. The funding allowed the company to invest in new projects, as well as create five new jobs.

The Knowledge Transfer Network is also a partner of Innovate UK, and is working hard to help female entrepreneurs with start-up grants, of which applications from female business owners has increased by 70 per cent since 2016.

Equity finance

Equity finance is the process of raising capital through the sale of some shares in your company in return for cash. The money can then be used to take on more staff, purchase equipment or invest in product development, which can in turn increase the value of your stake in the business without the worry of having to pay off loans and accrued interest. This can be useful for startup businesses which have not yet turned a profit but are showing signs of rapid growth – much like many innovative technology businesses we are seeing emerge today. However, the only downside is that you will no longer own the entire stake in the business, but there is real value in bringing an investor on board as it allows you to tap into their knowledge and expertise – they want your company to grow just as much as you do!

We have backed many excellent women founders with equity funding, and it has allowed them to take their businesses to the next level. In January this year, GC Angels co-invested as part of a £260,000 equity funding round in Immersify Education, a Salford-based EdTech start-up. The company provides learning tools for university students using augmented reality, interactive animation, gamification and personalised learning. Whilst the founder, Chloe Barrett, had launched a research-driven pilot across eight universities, she required capital to build out her development team and prepare her product for the market. Following the investment, the company is now targeting an official launch in the 2020/21 academic year.

Stories such as Immersify Education show what founders can do with the right funding behind them; all the more reason why it’s staggering to see that only one per cent of venture capital funding in the UK goes to all-female teams. GC Angels is striving to invest as equally as possible into entrepreneurs with funding ranging between £100,000 and £2m. Not only because it’s the right thing to do, but because it is estimated that up to £250bn could be added to the UK economy if women started and scaled their business at the same rate as men.

If that doesn’t inspire you, then you could always attend our events in Greater Manchester. Before the COVID pandemic, we hosted regular ‘#LaterPitches’ and ‘We Smash Barriers’ events – something I am keen to restart once social distancing guidelines are relaxed – providing ambitious women with the opportunity to hear and learn from other successful female business leaders.


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