Women-led businesses remain one of the UK’s fastest-growing economic forces, yet the female founders UK funding gap is still one of the biggest barriers to growth. The 2023 Rose Review of Female Entrepreneurship estimated there are around 1.6 million women-led businesses in the UK, contributing an estimated £85 billion a year to the economy. According to the most recent British Business Bank Small Business Equity Tracker, published in 2024, all-female founder teams received just 2% of UK equity investment, while all-male teams received 85%. For women trying to scale, this is not a historical problem. It is a current commercial barrier.

The state of female entrepreneurship in the UK

The 2023 Rose Review of Female Entrepreneurship, led by NatWest chief executive Alison Rose, found that if women started businesses at the same rate as men, the UK economy could gain up to £250 billion in extra value. According to the same review, women-led businesses are also more likely than male-led businesses to be motivated by social or environmental goals, and they tend to create more diverse workplaces.

However, women remain underrepresented among high-growth founders and in equity-backed companies. The latest women in business key UK facts show that while more women are starting businesses, the pace of change at the top end of the funding market is much slower. Closing that gap matters for productivity, innovation and regional growth, not only for fairness.

Sectors where women lead, and where they are underrepresented

Women-led businesses are not spread evenly across the economy. The most recent Office for National Statistics business population estimates, published in 2024, show female leadership is highest in service sectors such as health and social work, education, and other service activities, including 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.

The female founders UK funding gap and gender bias

The most visible sign of the entrepreneurship gender gap is in investment. The British Business Bank’s Small Business Equity Tracker 2024 found that 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. Average deal sizes are also smaller for female-led companies. The British Business Bank’s 2024 report found that all-female founder teams raised an average 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. British Business Bank research from 2024 suggests around one in three female entrepreneurs still encounter gender bias when raising capital. Women are more likely to be asked prevention-focused questions by investors, 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.

Scaling is affected too. The 2023 Rose Review notes that 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.

What is changing in 2026

Progress is possible, and several initiatives are already under way. As of 2024, the Investing in Women Code, launched by HM Treasury, 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. British Business Bank data from 2024 show that the 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.

Newer funds and female-led investment vehicles are also emerging, signalling that institutional capital is beginning to respond to the case for backing women founders. While these remain a small part of the overall market, they add pressure for more transparent data and better deal flow.

What women founders can do now

Funding alone will not close the gap. Women founders can take practical steps to strengthen their position:

• Build investor relationships before you need the money. Warm introductions and early conversations reduce the reliance on cold pitches.
• Prepare for prevention-focused questions. Anticipate questions about risk and have clear, data-backed answers that also show growth ambition.
• Track your metrics rigorously. Revenue growth, customer retention and unit economics matter to every investor.
• Explore government-backed finance first. Start Up Loans for female founders and British Business Bank programmes can provide capital without giving up equity.
• Join founder networks. Female angel networks and sector-specific groups can open doors that traditional networks keep closed.

The UK has made real progress in female entrepreneurship, but the female founders UK 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. For more context and resources, see our women in business key UK facts.