Are women driving startup success?

As representation of women in the tech and business remains a pressing issue, we take a close look at our data. How are women represented in high-growth businesses?

It’s no secret that women are underrepresented in leadership. Despite calls to further access to top positions in government and across business, there is a distinct lack of women in these roles. Indeed, based on a global survey of over 20,000 publicly traded firms, less than 5% have a female CEO.

In the UK, the number of female entrepreneurs has risen 40% between 2008 and 2016 – so how do the numbers stack up for ladies leading the country’s high-growth businesses? Are women driving startup successes, or do these disruptive and innovative companies betray a very old-fashioned gender divide?

We’ve still got a long way to go

From a sample of over 4,000 high-growth businesses, only 31% have at least one female employee at the “C-suite” level, and of those businesses only another 30% can count more than one. However, 38% of UK SMEs are at least partially led by women, which would suggest that they are less likely to lead a high-growth business.

So why? Tech is the most likely sector for a high-growth equity-backed business, and despite numerous efforts to attract women, it is still a highly male-dominated sector. Our data suggests that female-founded scaleups still tend to have a leaning towards stereotypically “feminine” sectors. For example, fast-growing fashion and beauty businesses Charlotte Tilbury, Temperley London and Roksanda.

Many successful female-founded businesses are active at the intersection of tech and the home, fashion or beauty. For example, Dressipi have developed an online fashion recommendation service that suggests items of clothing. However, women have also founded companies such as Peppermint Technology, who provide legal software, and Sugru, who have developed an adhesive that hardens into a rubber. We believe that with time women will play key roles across all sectors.

A fairer share of the pie

The same proportion of men and women (around 30%) in the “C-suite” are founders. This would suggest that although women are highly underrepresented in high-growth businesses by volume, those that are active in startups and scaleups are equally likely to own the business as men, which is a start. However, of these female “C-suite” employees, only around 5% are CEOs, as in publicly traded firms around the globe. Compared with 13% of male “C-suite”, women are still far less likely to lead, even as a founder.

The average size of total fundraising value for businesses with at least one woman founder is £962k, compared with an average of £1.45m for all businesses. This could point to women growing smaller businesses and experiencing less success, or could, hopefully, simply be an indication that female founders have only just got started, and, on average, aren’t as far along in company lifecycles.

More to come?

There are certainly success stories to be found: Hassle.com for one, which allows people to find, book and pay for vetted cleaners in their area. The founders Alex Depledge and Jules Coleman exited in June 2015 for €32m, and have recently joined Index Ventures as Entrepreneurs in Residence.

With the government predicting that more support for women entrepreneurs could help boost the economy by £600 billion, and the stack of evidence pointing to diverse workplaces promoting the success of businesses, we can only hope for more female leaders of high-growth businesses.

We’d love to hear from you. Get in touch to hear more about our data and approach, or take a tour of our product to see how your business can directly benefit.