Virgin StartUp has noticed a big drop in the number of women entrepreneurs applying for start-up loans compared to men over the last few months
The number of women entrepreneurs applying for a business start-up grant has nearly halved since lockdown, compared to the number of men which was down by under a quarter.
Virgin StartUp, a not-for-profit which funds business start-ups and launched a 50/50 gender funding pledge last August, says it was seeing 43% of all applications coming from women founders prior to the pandemic. Immediately prior to lockdown this had reached a peak of 47%. Over the next six weeks, however, it says this dropped as low as 23%. Its figures show that the gap in applications directly correlates to a gender funding gap for start-up businesses.
Applications for start-up funding from men also decreased during the first six weeks of lockdown with numbers dropping to 278, compared to 337 in the six weeks immediately preceding lockdown (a 17.5% decline). However, women’s application dropped from 215 in the six weeks prior to lockdown to 112 over the course of the first six weeks of lockdown (a 47.8% drop).
Virgin StartUp says the recent rates of applications from women are the lowest it has seen in its entire six-year history.
Its 50/50 pledge was launched in response to a perceived decline in applications from women which was impacting the gender funding gap. The six months leading up to the August launch had seen an average dip to 36% which, while still considerably higher than the national average of 20%, had led to rising concerns about a gender funding gap.
Sam Smethers, Chief Executive of the Fawcett Society said: “We know that women are being hit harder than men in terms of the economic impact of the Covid crisis and they are much more likely to be doing the majority of unpaid care work and carrying the emotional burden too.
“This new Virgin StartUp data suggests that female entrepreneurs are currently much less likely than men to be pursuing business start-up funding. It may be because they are being more cautious or more pessimistic than men, or because they just don’t have the capacity because they have taken on additional homeschooling and childcare responsibilities. Whatever the reason, if we are holding women back, we are holding the economy back and that is bad news for the UK recovery.”
Virgin StartUp says it is determined to double down on tackling the barriers to starting and scaling a business and has been offering specialist support to founders looking to start and scale a business during the Covid-19 crisis and to help reignite UK entrepreneurship.
Virgin StartUp managing director, Andy Fishburn said: “We are just as committed today as we were last August to working with women founders to strive for funding equality and to provide the support, guidance and mentoring services needed to make this sustainable. We are, all of us, currently operating under the most extraordinary circumstances, and we will endeavour to continue to be a valuable resource for all of the founders in our community, leaving nobody behind in the process.”
Virgin StartUp says women-founded businesses supported by Virgin StartUp have a 76% survival rate (73% for founders who are men) and are still trading after three years, surpassing the national average of 54%. It is planning to launch a ‘How to Start a Business’ workshop series to encourage entrepreneurship. More information can be found here.
*Startup loans of between £500 and £25,000 are available here.