Accelerating action: breaking funding barriers for women

Despite growing awareness of the importance of gender diversity in business and innovation, women-led start-ups continue to face disproportionate barriers to funding and investment.

However, these barriers are not experienced equally. Research consistently shows that women of colour, disabled women, LGBTQ+ women, and women from lower-income backgrounds face compounded disadvantages when trying to access funding, mentorship and investor networks. While initiatives have emerged to close the gap, systemic biases and structural obstacles remain.

The question is: are we moving fast enough to create real change, or is progress still too slow?

The funding gap: where are we now?

Driving this years’ International Women's Day theme is shocking data from the World Economic Forum, calculating that at the current rate of progress, it will take until 2158 to reach full gender parity – roughly five generations from now.

When it comes to grant funding for women entrepreneurs, the gap remains stark.The Rose Review, a landmark report published in 2019 highlighted that if women started and scaled new businesses at the same rate as men, this would result in up to £250 billion of new value add to the UK economy.

Yet, the disparity is even more pronounced for marginalised groups. Research shows that Black entrepreneurs in the UK received just 0.24% of total venture capital investment between 2009 and 2019, while women from lower-income backgrounds struggle with limited access to investor networks and financial safety nets, making early-stage funding even harder to secure. Intersectionality matters – without targeted action, efforts to close the funding gap risk leaving many women behind.

Addressing this inequality is not just about fairness; it represents a significant economic opportunity at a time when the UK faces mounting pressures. Challenges such as climate change demand innovative solutions to reduce emissions and reliance on fossil fuels, an ageing population requires advancements in health and social care, and volatile geopolitics are driving increased defence spending – all of which place greater demands on the public purse.

Ensuring more equitable access to funding will be critical to unlocking the full potential of women-led businesses developing innovative solutions for tackling these pressing issues.

The state of funding for women-led businesses

Spin-outs, start-ups and early-stage SMEs working on innovative solutions to these challenges are heavily reliant on grants and investment to bring their concept to market.

Accessing start-up funding and investment was identified by The Rose Review as the number one barrier for female entrepreneurs.

Looking at recent data from the Biotech sector, over the past ten years UK biotech CEO female representation increased from 12.4% in 2014 to 17.8% in 2024 which is a small sign of progress. However, 45% of survey respondents cited external bias (from investors and funders) as a challenge.

In the most recent Innovate UK applicant data, which analysed >4,400 grant submissions,66% of applications were from men with 29% from women which followed through to funding recipients, with 67% men and 29% women successfully being awarded grant funding. An improvement from 1 in 7 in 2016 to 1 in 3 in 2023.

The future: shifting the funding landscape

While progress is being made, systemic change is still needed to accelerate action. Initiatives such as Innovate UK’s Women in Innovation programme provide tailored support to female entrepreneurs, but broader changes in funding accessibility, mentorship, and investment culture are required.

With the ongoing spending review and recent Smart Grant consultation we have called for some changes that would hugely benefit all grant funding applicants especially female entrepreneurs e.g. a funding calendar, to enable forward planning. We would also suggest that competition deadlines should avoid school holidays, enabling women entrepreneurs to work around child care commitments. Plus more support for joint grant and investor partnerships would hugely benefit women entrepreneurs who are struggling to access investment to build relationships with future investors.

Targeted interventions like these are essential to ensure that all women, regardless of background, have a fair opportunity to secure funding and scale their businesses.

Why grant funding matters

For women-led businesses looking to scale, grant funding can be a powerful stepping stone. Beyond providing non-dilutive funding (with no loss of equity), grants require applicants to refine their business plans, define a market strategy and provide robust evidence of impact – all essential preparation for securing future private investment.

This International Women’s Day, we encourage women entrepreneurs to step forward and apply. Grant funding can provide the funding needed to turn ideas into impact, and with increasing pressure on funding bodies to prioritise diversity, there has never been a better time to take that first step.

Get support

If you’re a female entrepreneur looking to explore grant funding, we’re here to help. Get in touch to discuss your project and funding opportunities.

Further reading:

Resource and initiatives – British Business Bank

The Power Of Diversity And Inclusion: Driving Innovation And Success – Forbes article

The Rose Review of Female Entrepreneurship

Women in Innovation: understanding barriers to innovation – Innovate UK report

Women in Innovation – Innovate UK Business Connect

Innovate UK reveals the women innovators to watch in 2025 – UKRI

Gender Principles in Horizon Europe – Gender equality in research and innovation - European Commission