Innovate UK funding furore highlights women’s start-up struggles
Hundreds of female founders took to social media this weekend to express growing concerns surrounding the results of Innovate UK’s most recent funding competition for women in business.
The funding competition, titled Women in Innovation, was designed to encourage women leading small and medium-sized enterprises (SMEs) in the UK to apply for grants of up to £75,000 each.
There were a total of 1,452 applicants, of which 1,271 were deemed eligible for funding.
Despite the application process reportedly stating that there were 50 awards available and a £4m allocated fund, the group suddenly told applications late last week that it only intends to give awards to 25 projects.
The decision sparked a storm of commotion on social media, with many complaining that the shortfall in grants and application process as a whole has lacked transparency.
Taking to LinkedIn, one founder wrote: “We were told there would be 50 awards available, so it’s a bit of a gut punch to see that only half of those were actually awarded.”
Others have been asking questions about where the rest of the allocated funding has gone if only 25 women are set to receive grants.
Responding to the outrage online, Innovate UK eventually said it will address the “confusion and concern” in a “full update next week”, which will “better explain our intentions to support successful and unsuccessful applications in this programme”.
While the picture is still unclear, and there may be legitimate reasons for this sudden change by Innovate UK, the strength of reaction highlights that more needs to be done to back female entrepreneurs.
Research has shown that only 2p of every £1 of equity funding in the UK goes to female-founded businesses — yes, only 2 per cent — and despite all of the talk of boosting funding in recent years, that figure hasn’t changed in a decade.
Why we need to back more female founders
If the UK wants to build and maintain its crown as a top place for start-ups, it must harness the full potential of its population — regardless of gender.
The 2022 Rose Review of Entrepreneurship found that if women started and scaled businesses at the same pace as men, it could add up to £250bn in economic benefits.
Female-run private tech companies also generate a 35 per cent higher return on investment, according to a study by the Kaufman Foundation.
Another study by Mass Challenge and BCG found that women-founded start-ups generate over twice the revenue per dollar invested compared to those founded by men, making them better investments.
This potential alone should be enough to make a change.
If female founders, and their businesses, keep being overlooked, who knows how much innovation, product development, and economic potential the UK and its start-up ecosystem could miss out on.