Last week we selected 23 semi-finalists for this year’s AccelerateHER Awards programme.
They include a range of inspiring and innovative female-led companies that sit within four key growth sectors of technology, health, environment and culture.
Among them is a business delivering smart digital solutions to solve complex challenges within the energy industry; another that is providing more affordable solutions for individuals and institutions in the education and immigration sectors; and one that specialises in neurology and oncology to promote employee, client and patient wellbeing.
All of this year’s shortlisted companies build on AccelerateHER’s eight-year track record of supporting innovative female-led companies with strong growth potential. The awards, supported by the Scottish Government, provide a springboard to growth for participants by opening doors to new opportunities and market-building connections through the organisation’s global network.
Our focus on helping more women succeed in business exists, not only because there remains a significant gap between female-led companies and those run by men, but this approach will also deliver major economic benefits for Scotland and beyond.
Female entrepreneurship is on the rise.
Data from Companies House shows that 140,000 businesses were started by women in 2021, compared to just 56,000 in 2019 - and building on these numbers will be essential in increasing prosperity. A report released last year by NatWest suggested that if women were to open and scale businesses at the same rate as their male counterparts, it would add £250bn to the UK economy.
Achieving this ambition requires real focus on addressing the many challenges which are still adversely impacting female-led companies.
While it is encouraging to see an increasing number of women starting a business, many are being held back as they’re unable to access external growth investment. Part of the problem stems from an unconscious bias that sits with many of those providing that investment.
US research conducted by Professor Tory Higgins at Columbia University into what is called ‘regulatory focus’ highlighted how venture capital investors, including those who are themselves female, are much more inclined to ask different questions to company founders depending on their gender.
So called ‘promotional’ questions - focused on growth, gains and advancement - are more commonly asked of male founders, such as ‘how will you grow your customer base.’ Meanwhile. female founders are much more likely to be asked ‘preventative’ questions - focused on losses, safety and security - such as ‘how will you hang on to your existing customers’.
The impact of regulatory focus on US female entrepreneurs has been underlined by further research showing that women were behind 38% of new businesses, but secured just 2% of venture funding.
On a more positive note, follow up research on this phenomenon has shown that female founders who can turn a preventative question with a more promotional-focused response outlining their growth ambition and market opportunity, have gone on to secure significantly higher levels of external investment.
We do, however, need to address regulatory focus if we’re to ensure that the best businesses get access to the investment they require to reach their full potential.
The clear evidence showing female-led businesses are most impact by disproportionate preventative questioning is not only bad news for entrepreneurial women, but it also means investors are not always making the most prudent decisions.
Research released in 2018 by Boston Consulting Group showed that companies founded by women ultimately delivered higher revenues - more than double per dollar invested - compared to those founded by men. This not only underlines the quality of many female-led businesses, but it also shows that they are usually a better investment for financial backers.
As our AccelerateHER Awards semi-finalists companies continue their progress, we will give them our full support. This includes playing a key role in addressing the existing challenges such as regulatory focus which is holding back women and stunting the economic growth we so badly need.
Elizabeth Pirrie is the chief executive of AccelerateHER
