Inclusion is Good for Business

Gender equality in funding and entrepreneurship is a goal everyone should fight for, says Alex Smith, Co-founder of FuturePlus.

This year’s International Women’s Day falls under a long shadow that illustrates quite how much more work there is to be done to achieve true equity and inclusion for women in business.

“Competent white men must be in charge if you want things to work,” wrote President Trump’s new public diplomacy hire, Darren Beattie, in October. The US administration’s current ‘War on DEI’ has made a divisive issue even more so, just when we need to focus on hearing different perspectives and finding common ground – for everyone’s sake.

Despite growing discussions around gender diversity in entrepreneurship, the issue of funding for co-founded and female-founded teams is not improving at the pace we should expect. In the UK, according to the British Business Bank, for every £1 of venture capital (VC) investment, all-female founder teams get less than 1p. All-male founder teams get 89p, and mixed gender teams get the remaining 10p. Is it any wonder, when only 13% of senior people on UK VC investment teams are women, and 48% of investment teams have no women at all?

The authority gap

The investment gap is not moving in the right direction, and – echoing Beattie’s suggestion that women simply aren’t cut out for leadership – some commentators have suggested that the blame should fall at female founders’ feet for a perceived lack of ambition in negotiations with investors. In my experience as a female founder, that’s nonsense.

Women’s ambition and innovation is not the barrier; rather, entrenched biases, particularly the ‘authority gap’, continue to undermine access to capital and opportunities. Mary Ann Sieghart’s research in her book, ‘The Authority Gap’, highlights how women, regardless of expertise or leadership roles, are often not afforded the same level of credibility or trust as their male counterparts. These biases are something that women are often equally responsible for, as we can be as hard on each other.

This phenomenon seems to persist in the VC and private equity (PE) context. This ecosystem has created a self-perpetuating cycle where investment decisions continue to favour male-led ventures (due to their current make up), limiting the growth potential of women-led businesses. If women’s ideas and leadership are undervalued, it makes it disproportionately difficult for female founders to secure investment.

There’s no end to women’s ambition, ability or anything else that makes us highly competent and successful leaders. But the playing field is still riddled with inequality and bias, thanks in no small part to the lack of diversity that continues to plague the top VC firms – highlighted by the fact that not only are women severely underrepresented, but almost three-quarters of partners at UK firms also have a private school background. Intersectionality remains an enormous challenge for the sector, impacting funding opportunities for many of us.

Momentum for change

There is, however, societal momentum pushing for change. Data from Ipsos shows that nearly half (47%) of people across 29 countries believe efforts to promote equality need to go further, compared to only 19% who feel they have gone too far. However, the challenge remains acute in English-speaking countries, where scepticism towards these efforts is more pronounced. In the US, Canada, and Poland, nearly 27% of respondents believe equality initiatives have overreached. Particularly concerning is the spike in Gen Z men holding this view – while 19% of the general population think efforts have gone too far, this figure jumps to 27% among young men, indicating a growing resistance to gender equity efforts in younger generations.

This resistance, combined with the existing imbalance in VC and PE leadership and funding, could create even greater barriers for female founders in the future, especially when considering the impact of intersectionality. Women of color, LGBTQ+ founders, and those from other marginalised backgrounds face even steeper challenges in accessing capital and business networks. Without intentional and sustained action, we risk reinforcing exclusionary practices that stifle innovation and economic growth.

It is our collective responsibility to continue advocating for inclusion, not just as a matter of social justice but as a business imperative. Promoting gender equality in funding and entrepreneurship is not just beneficial for women, it is good for men, too. A more inclusive investment landscape encourages stronger economies, greater innovation, and more diverse problem-solving approaches, leading to better products and services that benefit everyone.

In 2023, a study of the Fortune 1000 list of the most successful companies found that while only 8% were led by women, those companies significantly outperformed their male-led counterparts in terms of revenue. Many of the world’s most successful brands recognise that exclusionary culture is bad for business. Today, in the midst of significant pressure to roll back their DEI strategies, companies including Coca-Cola argue that doing so will certainly impact business growth and performance.

Growth for all

When men work in environments where leadership and opportunity are based on merit rather than gender, they also gain from a fairer, more dynamic workplace. Reducing gender biases creates healthier work cultures, encourages collaboration, and ultimately leads to stronger businesses that drive economic growth for all.

The path forward requires more than just acknowledging these disparities; it demands structural change, increased accountability within investment firms, and a commitment to breaking down the investment and authority gap that continues to hold women back. While there’s certainly room for groups with common issues and goals to meet and support each other, women-only events, taskforces and committees can’t solve a problem that’s everyone’s responsibility: including men. I’ve noticed that women and non-binary people often outnumber men at DEI-focused events. We need them to join these discussions.

Women have been fighting for decades to cement and advance our position in the workforce, and we’re not going to stop now. But this isn’t just a woman’s fight. Homogeneity in all corners of society creates groupthink, producing an echo chamber that reinforces existing biases, which in turn stagnate innovation and creativity. For women in the world of startups, VC and PE, this isn’t just an issue about basic fairness – it’s about what makes the most business sense.

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