Female founders are significantly more vulnerable to the dilutive effects of equity funding than their male counterparts, according to new research from JP Morgan, which shows women, on average, give away much larger stakes in their businesses than men.
The UK’s 10,647 female led businesses raised a record £5.05bn in equity investment in 2021, whilst generating £84.7bn in sales and employing almost 700,000 staff.
However, the investment bank’s research shows female founders, on average, gave away almost twice as much equity, for the same investment, as their male counterparts, when raising money to invest in their own firms.
Charlotte Bobroff, senior advisor to women entrepreneurs across the UK at J.P. Morgan Private Bank, said: “The data shows us that when female founders do raise equity, they give up a larger percentage of their ownership than male founders.”
The research found that London (3,754) is home to a significantly greater number of female-led businesses than any other region of Britain, including the South East (1,431), South West (758), and North West of England (775).
Female led business particularly thrived in sectors that have traditionally employed large numbers of women, in industries such as clothing, healthcare products and e-commerce.