Women-led businesses remain one of the UK’s fastest-growing economic forces, yet the UK female entrepreneurs funding gap shows no sign of closing. The 2024 Rose Review Progress Report found around 1.6 million women-led businesses in the UK, a 23% increase since 2018. That growth outpaces male-led businesses, which rose by 7% over the same period. Together, women-led firms contribute an estimated £105 billion a year to the UK economy.

Research by the British Business Bank and NatWest suggests around one in three female entrepreneurs still encounter gender bias when raising capital. The facts about women in business show female founders consistently receive a smaller share of investment than their male counterparts. Closing the gap matters not only for fairness, but for productivity, innovation and regional growth.

The state of female entrepreneurship in the UK

The 2024 Rose Review of Female Entrepreneurship found that women now make up a growing share of UK business founders. If women started businesses at the same rate as men, the UK economy could gain up to £250 billion in extra value. The review also notes that women-led businesses are more likely than male-led businesses to be motivated by social or environmental goals, and they tend to create diverse workplaces.

However, women remain underrepresented among high-growth founders and in equity-backed companies. While the overall number of women-led businesses is rising, the pace of change at the top end of the funding market is much slower. Women-led firms are only around half as likely as male-led firms to reach £1 million turnover, partly because of lower starting capital and smaller follow-on funding rounds.

Sectors where women lead — and where they are underrepresented

Women-led businesses are not spread evenly across the economy. Office for National Statistics business population estimates show that female leadership is highest in service sectors such as health and social work, education, and other service activities, which includes personal services such as hair and beauty. Accommodation and food service, professional and technical services, and arts and entertainment also have a relatively high share of women-led firms.

By contrast, women remain heavily underrepresented in construction, transport and storage, production, and information and communication. These patterns matter because some of the most equity-intensive and high-growth sectors, including technology and advanced manufacturing, are also the ones with the lowest share of female founders.

• Over-represented: health and social work; education; other service activities; accommodation and food service; professional, scientific and technical activities.
• Under-represented: construction; transport and storage; production; information and communication; mining and utilities.

Why the UK female entrepreneurs funding gap persists

The most visible sign of the entrepreneurship gender gap is in investment. According to the British Business Bank’s Small Business Equity Tracker 2024, all-female founder teams received just 2% of UK equity investment, while all-male teams received 85% and mixed-gender teams received 13%. Put another way, female founders received just 2p for every £1 of equity invested.

The gap is not only about the number of deals. Median deal sizes are also smaller for female-led companies. The British Business Bank found that all-female founder teams raised a median of £1.6 million per deal, compared with £2.7 million for all-male teams. That difference makes it harder for women-led businesses to hire, invest in technology and expand into new markets.

Beyond the raw figures, many female founders report a less visible barrier: bias in the investment process. Research by the British Business Bank and others has found that investors are more likely to ask women prevention-focused questions about risk, safety and responsibility, while men are asked promotion-focused questions about growth, ambition and returns. Women are also less likely to have existing networks of angel investors and venture capitalists, which are often the route to first funding rounds.

The UK female entrepreneurs funding gap in numbers

The scale of the gap becomes clearer when the figures are set side by side. The 2024 Rose Review Progress Report estimates there are 1.6 million women-led businesses in the UK, yet they attract only 2% of equity investment. Male-led teams continue to dominate both deal volume and deal value. Women-led firms are half as likely to reach £1 million turnover, and they raise smaller follow-on rounds.

These disparities are not explained by differences in ambition or capability. The Rose Review notes that women-led businesses often score highly on social impact, innovation and resilience. The problem is structural: smaller networks, fewer female decision-makers in venture capital, and pitching cultures that reward promotion-style narratives.

What will close the UK female entrepreneurs funding gap?

Progress is possible, and several initiatives are already under way. The Investing in Women Code, launched by HM Treasury, now has more than 200 signatories representing the majority of UK venture capital assets under management. Signatories commit to collecting and publishing data on the gender balance of the founders they fund, and to taking action to improve access for women.

Government-backed schemes also play a role. The British Business Bank’s Start Up Loans programme has supported tens of thousands of female founders, and women now receive around two in five loans through the scheme. Regional funds, female angel networks and sector-specific accelerators are helping to build pipelines of investment-ready women-led businesses.

But funding alone is not enough. Closing the gap will require:

• Better data and transparency: Investors and founders need consistent, published data on who receives finance and on what terms.
• Stronger networks and mentorship: Female founders need access to experienced investors, peer networks and sector-specific mentors. See our guide to networking for women in business.
• Family-friendly entrepreneurship: Affordable childcare, shared parental leave and flexible working can make starting and scaling a business more feasible.
• Support into high-growth sectors: Targeted training, procurement and outreach can help more women enter technology, engineering and construction.
• Addressing bias in pitch and decision-making: Investor education and diverse investment committees can reduce the different questions women founders face.

What female founders can do now

While systemic change takes time, individual founders can take practical steps to strengthen their funding position. Build relationships with investors before you need capital. Attend pitch events run by female-focused networks and regional angel groups backed by the British Business Bank. Prepare for prevention-focused questions by framing risk mitigation as part of your growth story. Track your metrics clearly and benchmark your valuation against comparable deals in your sector.

It also pays to understand the full range of finance options. Equity is not the only route. The Start Up Loans programme, government grants, crowdfunding, revenue-based finance and invoice finance can all suit different business models. Our guide to business finance for women can help you compare the options.

The bottom line

The UK has made real progress in female entrepreneurship, but the funding gap shows that growth is not the same as equality. Until female founders can access capital on equal terms, the full economic and social potential of women-led businesses will remain untapped. The latest data makes the case for continued pressure on investors, policymakers and business support organisations to turn momentum into measurable change.