Minister’s shock at investment gap faced by women in business

Poppy Gustafsson, the investment minister, has said it is unacceptable that so little venture capital cash goes to teams of female founders and has urged investors to create a more “inclusive economic landscape”.
Speaking at an event at Mansion House in London on Monday to mark the launch of a dedicated £255 million fund for female founded or led businesses, Gustafsson described the venture capital landscape for women as in a “terrible state”.
She said that when she read data from the government’s Invest in Women Taskforce, which showed that all-female founded businesses received just 1.8 per cent — equivalent to £145 million — of the total value of equity investment in the first half of 2024, she was so shocked that she thought that it “must be a mistake, that [it] must be an order of magnitude out”.
Gustafsson, former chief executive of the cybersecurity firm Darktrace, which was acquired by the US private equity firm Thoma Bravo for $5.3 billion in October, said investors were missing a trick by not backing more women.
“If women were able to grow and scale their businesses at the same rate as men, it could unlock an additional £250 billion in the UK economy,” she said. “Why would we not do that?”
She followed this with a plea to the investors gathered in the room. “Pension funds and institutional investors … have got such an outsized influence and impact on the companies that you invest [in] and with that influence comes real responsibility and opportunity. And it’s a responsibility to shape what can be a really inclusive economic landscape.
“This is not just a box-ticking exercise, it’s not something you talk about in your ESG statements. It’s about generating value and commercial opportunities,” added Gustafsson, speaking in one of her first public appearances since being named investment minister in October.
Stephen Welton, chairman of the British Business Bank, the government’s economic development bank; Stella Peace, interim executive chair of Innovate UK, the innovation funding agency; and Jenny Tooth, chief executive of the UK Business Angels Association, were among those in the room.
The Invest in Women Taskforce, set up under the last government to address the shortage of growth capital available to women business owners, has secured funding from institutions such as Morgan Stanley, M&G and Aviva.
Debbie Wosskow, a serial entrepreneur and investor who co-chairs the taskforce, said the fund would invest in companies founded or co-founded by women or where a woman is in a senior leadership position and owns at least 10 per cent of the equity.
The fund will also only use women investment professionals, “recognising that female investors are twice as likely to invest in female-led and mixed businesses, breaking down the systemic barriers faced by women entrepreneurs and investors alike”.
Rachel Reeves, the chancellor, has backed the initiative, saying in support of the launch of the fund: “It is, if we are honest, easier to start a business and grow a business as a man.”
Wosskow said that the fund would give “female investors the power to drive change”.
“I’m thrilled that investors from both the public and private sector have joined us and recognise the enormous opportunity here,” she said.