Tuesday 24 August 2021 4:44 pm

Exclusive: The City's IPO women on 'the male-dominated, testosterone-driven culture'

When an investor attending a presentation at the RAF club asked Cath O’Neill if she could take his coat, she was bemused.

A short while later the same investor apologised profusely, having realized he had mistaken the only female CEO for a member of the waiting staff.

O’Neil, who was by then accustomed to being the only woman at such networking events, re-tells the story and laughs at the absurdity of the sector. 

The figures behind her experience could also be called absurd, but are far from laughable, however.

Between 2016 and 2020 there were more men with the names Steve, Stephen, John or Jonathan, who led IPOs than women.

In fact, female founded IPOs accounted for less than four per cent of all IPOs since 2016, according to data published and shared with City A.M. last month.

IPO activity fluctuated over the last five years with a surge in 2017 followed by sharp drops, though the capital raised for each IPO has been increasing, according to the data. The average IPO fundraise for 2021 so far is around £70m, compared with £56m in 2016.

But female founded or led IPOs were found to have raised £10m less on average than their male counterparts, with the latter raising around £69.6m on average compared with £59m raised by female peers.

The review of five years of IPO activity showed that out of the 276 companies that went public on the London Stock Exchange between 2016 and 2020 – just ten were led by a female CEO or founder. 

City women 

City A.M. sat down with three of them to learn about the reality, behind the numbers, of being a female IPO leader: 

“I have advised on over 100 IPOs over my career, but none were more nerve-wracking than my own.” 

Sam Smith, CEO and founder of finnCap Group

For Nicky Foulston, who first took a company public in 1996, the decision to do it all again in 2018 was still not an easy one.

Now the group chief executive of professional services group Rosenblatt, Foulston said: “there is a lot more pressure in the role of CEO, running a business.” 

“You have financial targets,” she explained, “and the market does not like it if you miss those targets.”

“The other thing that hit me,” Foulston continued, “is that I last floated a company in 1996. It was an incredibly different environment where you only had print, radio and television media.” 

Foulston said a big change was the constant scrutiny and monitoring of company share prices, facilitated by digital media. 

The 24/7 nature of media now, she said, means: “Your vision is being played out on a public stage, so if you fail, it is also a much more public failure – compared to being in a private arena.”

Commenting on the latest statistics she said: “I think it does matter that there’s fewer women leaders.”

For Foulston, women bring something “very different to a boardroom,” referring to a report she once read that, she says, found there was less conflict and more harmony in boardrooms with women. 

Foulston believes that a lot of work has been done. She has witnessed “a massive change” in working practices to allow women to be more flexible with childcare.

But as a working mum she warned: “When you’re in those top jobs, it is a massive commitment of time, and if you’ve got family then for women it’s a hard decision, and I don’t know how we address that.”

The founding chief executive officer of SkinBioTherapeutics plc, a microbiome company developing innovative therapies for skin in health and disease, had a much brisker response when asked if she would take another company public again. 

“No,” said Cath O’Neill firmly, who is now the company’s chief scientific officer after stepping down as CEO in 2017. 

“I don’t think it matters whether you’re male or female – leading an IPO is a blooming nightmare. It’s an experience that involves a lot of lawyers.”

Like Foulston, O’Neill acknowledged the public nature of listing a company could be daunting. “It is public, so everything is on public display,” she said. 

O’Neill, who started her career in academia, was unsurprised by the low number of women leading IPOs. 

“The City is totally male dominated and it’s a very testosterone driven culture.” 

“Some investor presentations that I gave,” O’Neill recalls, “they’re in places like the RAF club. That’s a typical venue that brokers or the organiser would pick: an incredibly male dominated environment.” 

“I went to one of these presentations and, apart from the ladies serving drinks, I was the only female in the room. It was quite funny, but also quite sad, because an investor came up to me and asked me where he should hang up his coat – and it was only after I gave a presentation that he came up to me, very embarrassed, and said `I’m so sorry.’ ”

She thinks this might be one of the reasons so few listed companies are led by women. And the problem, she says, extends even into online spaces like the London Stock Exchange website bulletin or the ADVFN boards, a private investor website with over five million users, where, O’ Neill says, users are “incredibly rude”.

What did come as a shock to her though, were statistics that showed investment in female led companies trailed behind male ones. For O’Neill this was particularly worrying: “There’s something really really wrong there. Because the inference is that women can’t be trusted to lead companies.”

“Is she going to have a glass ceiling? Is she not going to be able to go as far as she can, simply because of her gender? That’s when it really hits home.”

John Lucas, chief executive officer of Oxford Cannabinoid Technologies

One woman who has been trusted with over 200 transactions, IPOs and secondary fund raisings, is Sam Smith, CEO and founder of finnCap Group.

After qualifying as a chartered accountant with KPMG, Smith went on to found her own company in 2007. She led the buyout of JM Finn’s corporate advisory and broking division as the youngest and only female chief executive of a City broker.

A vocal advocate for women pursuing business careers, Smith believes role models are one of the keys to change. 

“If more women lead IPOs, it will encourage others to do so too, particularly in today’s climate where we are seeing more and more female-led businesses scale up.”

Another, is confidence. “I have advised on over 100 IPOS over my career,” Smith explains, “but none were more nerve-wracking than my own.” 

“Confidence can be a huge potential problem as you are putting your business in the spotlight. We need more success stories of other women doing this – it will really make a big difference in taking the scary factor away.”

John and Steve

One of the 24 IPO leaders with a variation of the name of John or Steve, agreed with Smith.

Dr John Lucas is the chief executive officer of Oxford Cannabinoid Technologies (OCT), a company which makes painkillers using cannabis components and debuted on the London Stock Exchange earlier this year.

For Lucas, making sure more women were present in the OCT boardroom, where they currently make up half, was a personal priority. 

“I think about it everyday, about my daughter,” Lucas explained, “she wouldn’t have the same opportunities that she would have if she were a boy and that has helped build my perspective.”

Having and watching his own daughter grow up, and thinking about her future sometimes concerns Lucas: “I am worried: Is she going to have a glass ceiling? Is she not going to be able to go as far as she can, simply because of her gender? That’s when it really hits home.” 

The latest figures for 2021 though give reason for cautious optimism. Four female founders have already been seen this year out of 37 IPOs.

Commenting on the boom in IPOs during the pandemic, Smith was sanguine about the future of both IPOs and women’s place leading them: “Hopefully now, the IPO market being open will encourage more fast growth companies to consider it as an option and particularly for female founded companies that might not have considered it as an option previously.”