A report by the Entrepreneurs Network, in conjunction with Barclays, shows that female-founded equity-backed businesses were twice as likely to have faced significant disruptions — such closed premises or a delayed product launch — then businesses founded by men. There is some good news though. As of September, 60% of them are back to normal operating with minimal disruption to their business.
One of the reasons for the higher disruption seen by female-founded businesses was the funding gap already in place before the pandemic hit. In 2020, only 13% of equity investment went to female-founded startups and, when money did go to them, it tended to be smaller amounts. Women are also less likely to seek external finance to bolster cash flows than men, the report found, leaving them with less available financing when a crisis comes along.
There’s also the fact that, during lockdowns, women tended to do more unpaid work in the home than men — with the report finding that means female founders had less time to put into their businesses during the pandemic. In the UK, for example, before the pandemic, mothers worked 80% of the hours that fathers did, but during the lockdown, this dropped to 70% as women took on more childcare and duties in the house.
Women are also more likely to found startups in industries that were worse affected by the pandemic, the report found, such as retail, hospitality and leisure. Female-founded businesses are also less likely to be tech-based — only 28% are — and it’s those businesses which saw the most opportunities for growth as a result of the pandemic.
More governmental policies are needed, the report suggests: things like publishing statistics on the gender breakdowns of founders, designing new business support schemes and making sure parental pay is equal for everyone.
You can read the full report here: https://www.tenentrepreneurs.org/latest-report