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In this article, we cover how you'll know if an investor is right for you and the questions female founders should ask investors when raising business investment.

Brilliant female-founded start-ups are severely hindered by sexism in the male-dominated investment sector. We've seen it first-hand over and over again. Even our founder and CEO, Julia Elliott Brown, the leading fundraising expert working with female-led start-ups to get the funding they deserve, experienced sexism on her entrepreneurial journey launching, growing and funding successful businesses. Entrepreneurs and the start-up community must openly discuss this sensitive subject and potential solutions. Is there still a lack of investment in female founders? Yes. Absolutely. According to the European Investment Bank, "female-founded companies deliver twice as much revenue per dollar invested, despite receiving less than half of the investment capital of their male peers," and startlingly, "female entrepreneurs pulled in only a tiny fraction - 1% - of venture capital investment in 2021." These figures highlight the difficulty female entrepreneurs face while also highlighting how tragic it is that so many women are missing out on achieving their goals due to their gender. Statistics from Simply Business, show that only 29 percent of UK small businesses are run by women and this falls to just four per cent in the trades, according to Simply Business research. Julia's personal experience Julia's own experience with investors is comparable to that of many other female founders. At first, she was having great success gaining funding for the "fashion-tech" design-your-own shoe firm, Upper Street, a business she founded with her sister. The casual misogyny they encountered, however, made her realise that most male venture investors didn't take her female-owned enterprises seriously. One said “isn’t it just a nice little lifestyle company you can run to fit around your kids and family life?”. She soon discovered that it was not only male venture capitalists with this kind of attitude. A male bank lender visited her house to evaluate their account a year after the business bank approved our loan. After seeing her new kitchen, he made a remark along the lines of "is this what you spent the money on then". Would he have joked with a male this same way? Very likely not. Then he went a step further inquiring about the occupation of her spouse. Not a question he would have posed to a male founder. She met an investor at an event a few years ago, and after learning about the work we do with female founders at Enter The Arena, he said “What are you, some kind of feminazi?”. This is the opposition we face. It is absurd. Many of you have also experienced it In the seven years we've spent helping female entrepreneurs with their investment raises and interviewing them for the podcast Fundraising Stories with Female Founders , we've realised that sexism is tragically something that almost every female founder encounters. Tersha Willis , a client of ours and the founder of Terrible*, a clothing line for the creative industries, once told me, “getting asked out on a date when you’re on a pitch, it’s pretty much, that’s the worst thing that can happen because it makes you feel like this is it’‘. Alex Pluthero from Freedom Underwear said “I was asked a number of times, not outright, but they basically wanted to know if this was a lifestyle business and if I was just about to go and have kids”. Concerns about pregnancy and ‘lifestyle’ businesses are recurring topics for female founders. Even though males would never be exposed to such subjects, barriers for women clearly still exist. It’s wrong to ask founders questions like this. When investors behave in this inappropriate way, it sends the message that female founders lack the credibility to be taken seriously as opposed to their male counterparts. As a result, fewer women start, invest, and grow their firms, which causes the market to become even more saturated with male-dominated companies. The problem extends beyond the unwelcome advances. Minimising our successes, or "venturesplaining," as I refer to it in my book , happens frequently. You're probed and prodded; to these usually older male investors, you're an experiment, and when their tests are complete, you’ve likely failed. Men simply aren't held to the same standards. So, what can be done? There’s a lot of discussion about the need for more women to lead VC firms and for female angel investors to promote diversity. But it shouldn’t be down to only women. By having both male and female investors, we can hugely improve the prospects of women. Male investors, male entrepreneurs, and the whole investment ecosystem must examine and address sexism. And it’s not just about making these moves on International Women’s Day. The investment community must implement year-round tactics to deal with sexist behaviour in fundraising and start-ups. To push past gender stereotypes and casual sexism when raising investment, join the Fundraising Academy .

Fundraising successfully while running your business, dealing with life and staying sane is about breaking down the task ahead into bite-sized chunks, so you don’t become overwhelmed. It's a step-by-step process. Here we go through the five key steps, and what you need to do.

One of the biggest issues that we see for female founders is leaving it too late to start working on your fundraising campaign. You might keep putting your fundraise off for as long as possible because you're afraid of or don't understand the process, are worried you don’t have everything ready, are constantly trying to do everything perfectly or are just caught up with the day to day (i.e. firefighting) of running your business without enough resource, along with dealing with life in general. All of this is super stressful, but adopting a head in the sand approach to funding isn’t the solution. If you need funding to make your business a success, it can be extremely dangerous to procrastinate.

If you’re a female founder raising finance in the UK, you have a UK-registered company (or have a branch or subsidiary in the UK), and you’re a UK resident, you may qualify for the Seed Enterprise Investment Scheme (SEIS) and/or the Enterprise Investment Scheme (EIS). Early-stage investors are much more interested in those companies that qualify for SEIS/EIS because they can get attractive tax breaks whilst supporting high-growth UK companies. 80% (i) of the total UK angel investors' portfolio is in SEIS/EIS eligible businesses, demonstrating just how important this is to them. In September 22 the UK government extended the SEIS scheme. In challenging times, investors tend to put their money into their existing portfolio or in less risky later stage businesses, where there are far fewer women-led start-ups in play. So, by encouraging money to flow into the pre-seed venture stage businesses should in theory mean we fund more female founders. Key benefits of the scheme Some key benefits of the scheme are that investors can claim back up to 50% of their investment against income tax, offset any losses they make against capital gains or income tax, and don’t have to pay capital gains tax when they sell their shares if they’ve held them for at least 3 years, nor pay any inheritance tax if shares held for at least 2 years. (Win-win!) Note that you must use any qualifying investment to grow the business through trading activity or investing in research and development; you can’t use EIS funding to pay back loans. Employees, major shareholders, and family members who invest in your business don’t qualify for the scheme. If you’re raising money using an ASA this can still be done within the SEIS / EIS investment scheme if your ‘priced’ investment round happens within 6-months. Here are the key differences between the two schemes: SEIS • Focused on very early-stage companies • Your business must have been trading for less than 3 years • Only the first £250k you raise can qualify • Investors get 50% tax break • Investors can put in a maximum of £200k total per year into SEIS start-ups • Investors can’t take more than a 30% stake in your business to qualify EIS • Designed with small and medium-sized businesses in mind • Your business must have been trading for less than 7 years, or have raised some EIS funding within the first 7 years • You may raise up to £5m per year of EIS funding • Investors get 30% tax break • Investors can put in a maximum of £1m total per year into EIS start-ups Do check all the latest rules and qualification criteria on SEIS and EIS with HMRC. Most investors will want to see you have Advanced Assurance that you qualify for SEIS/EIS before they invest, which you can apply for from HMRC. You’ll need to have all the information about your business (for example, your financial forecasts and pitch documents) ready to send in with your application. It’s possible to make this application yourself, although you may wish to get the support of your financial advisor if you feel your case might be complex or to be certain you’ll get it all right. So female founders if you think you qualify, it may be a great opportunity for you and your business. For further information or need help during the application process, please get in touch with us!

If you’re in the first few years of running your start-up, you’re probably thinking about how to finance the growth of your company. Investment is something you may be considering. But is it right for you? We walk through the options available to you depending on where you are on your journey.

Do your eyes glaze over when you think about preparing your finance stuff for fundraising? Well, you are not alone! Yet, without having a strong handle on your numbers and understanding how business is performing, female founders won’t have a chance of getting an investment. As a female founder in today’s world, it’s time to fully grasp that handle on the numbers, and never more so than when raising investment. We know that female founders hold back from asking for funding if they’re not confident with their financial skills and will often come under more scrutiny on their financials too.