I firmly believe that the UK is a global player in the health arena. It holds a unique position at the sharp end of scientific discovery and the development of effective treatments. Moreover, it has the potential to deliver the strong growth that the economy needs to recover from COVID-19 and the subsequent financial downturn. So why would we slow progress by refusing to fund promising emerging companies for the simple reason that their founders are women?
The reality stretches credulity here – but that is exactly what is happening. Female-led start-ups in the UK are being left out in the cold. They are unable to gain “warm” introductions to venture capital funds and are getting turned down for funding in far greater numbers than applications from their male counterparts.
The UK is not quite at the level of Austria, where not one single euro of the €881 million raised in venture capital during the first half of 2022 went to an all-female-founded team (according to a recent report by Female Founders and Ernst & Young.) But it’s not much better. A 2019 report by the British Business Bank (UK VC & Female Founders report - British Business Bank (british-business-bank.co.uk)) showed that all-female founder teams received less than 1 penny for every £1 of venture capital investment; perhaps worse, 83 percent of investments made by UK venture capital firms went to companies that had no women at all on their founding teams.
Has the situation improved in the last three years? I’d like to think so, but without new data we cannot be certain that women are getting a seat at the table.
If the UK wants to retain a position as a world leader in life sciences, the country needs to capitalize on every ounce of talent. And that means progress cannot be blocked by “old boys’ clubs” – some of whose members remain deaf to ideas, input, and requests for funding from women.
There are a handful of venture capital funds that are dedicated to backing female funders. Our Fund, Discovery Park Ventures, is among them. Though we have no restrictions on applications, the fact that four out of four of our first investments have gone to companies with female founders is indicative of how committed we are to supporting exceptional science and talented teams, without reverting to outdated ideas about who sits on the board of directors.
Those we have backed so far include Vitarka Therapeutics (formed by Vineeta Tripathi in 2021 to create combination medicine using RNAi therapies for patients with late-stage cancers) and, most recently, BoobyBiome (founded by scientists Lydia Mapstone, Sioned Jones, and Tara O’Driscoll to develop a novel product for babies who do not have access to the beneficial microbiome found in breast milk).
Uzma Choudry, Investment Manager with Octopus Ventures, is also keen to see change. She says, “In the UK, less than 5 percent of all venture capital goes into companies with female founders. Anecdotally, I can say that in biotech that number is far lower. People tend to invest in people like themselves. This is a particular problem in venture capital, where investment teams tend not to be diverse by most measures. That lack of diversity is reflected in who they meet, the questions they ask (it’s proven that male founders are asked different questions to female founders), and where they invest.
“To ensure more diverse founders receive their share of funding and that we’re backing the best ideas and teams no matter who they are and where they come from, we need to undertake the hard work of building teams that reflect a diversity of viewpoints and experiences,” says Choudry. “And that means looking in new places for talent, implementing new hiring processes, and treating differences as a strength by default. It also means venture capitalists should stretch themselves to invest in the broadest and most inclusive group of founders by setting targets, changing our processes to root out favoritism, and building ways to reach founders that we might otherwise miss.”
I agree with Uzma, but it isn’t just funding that the UK must improve; we need to attract a pipeline of female talent (from school leavers upwards) into the life sciences sector to ensure that we continue to achieve a balanced approach – with fresh ideas, input, and new ways of looking at problems. We need this new wave to influence our businesses at every level.
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