It was never about the money at the wedding dress design business Mirror Mirror. “Will our brides be thrilled? Will our peers love the dresses? That was what drove us,” said co-founder Maria Yiannikaris. “For too long, if I’m honest. We were buried under the creative aspect of the business.”
Some 27 years have passed since Yiannikaris, 59, and her sister-in-law Jane Nicolls, 54, started making couture gowns in a spare bedroom, backed by a £12,000 bank loan. Annual sales have reached £1.5m and clients have included Amanda Holden and Zoë Ball.
They admit their business could be bigger if they had been willing to take on outside investors. “We were stunting ourselves without realising it,” said Yiannikaris.
Women are much less likely than men to sell a stake in their company to fuel growth. Of the entrepreneurs who tried to find outside investment in the 12 months to January 2016, only 22.6% were women, according to the government’s Small Business Survey.
Roughly one-third of Britain’s companies are set up and run by women, but only 10% of venture capital money flowed to female entrepreneurs last year. Several British business angels are now trying to redress this balance.
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Debbie Wosskow, founder of the home rental start-up Love Home Swap, is also a co-founder of All Bright, a new fund aiming to invest £10m solely in start-ups led by women. All Bright, set up with Anna Jones, 41, head of Hearst Magazines UK, also has an angel network, a crowdfunding platform and an accelerator programme.
“The big, hairy, audacious goal is to make Britain the best place in the world for female founders,” said Wosskow. In America, women are twice as likely as in the UK to start a business. “We’re trying to change the conversation and make it easier for women to get started.”
Wosskow, 42, hopes to dispel “the Dragons’ Den or Apprentice” idea that women will have to pitch to aggressive people “who are mostly male in suits”.
She herself hit problems when she raised funds for her home exchange site. “It was difficult to convince investors that anyone would stay in a stranger’s home. But it was also because I was a woman — I’m clear about that.”
Some studies suggest women simply tend to be more risk-averse. A report by Barclays last year found that women prefer to reinvest profits rather than give shares to outsiders. Yet the reasons for this difference are not obvious.
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“Women in general are slightly less mad than men. They make decisions on the business itself rather than the ego issues around it,” said Richard Reed, a partner at Jam Jar Investments and co-founder of Innocent Drinks.
Another backer of female-led start-ups is Angel Academe, a three-year-old network set up by Sarah Turner, 50, and Simon Hopkins, 49. It invests between £100,000 and £500,000, and has handed cash to 11 companies so far.
“We’re not about bashing other networks, but our feeling is that if women pitch in front of a room of mostly women angel investors, they get a more positive response,” said Hopkins. “We have heard horror stories of pitching to certain male-only groups.”
“Women are slightly less mad than men. they make decisions on the business rather than egoRichard Reed, partner at Jam Jar Investments and co-founder of Innocent Drinks
There is some proof of this: a sample of investors preferred pitches by male entrepreneurs even when the content was identical, according to a study from Harvard, Wharton and MIT.
The chocolatier Amelia Rope, whose bars are sold in shops including Selfridges and Whole Foods Market, has had talks with at least 20 tentative investors since she set up the company in London a decade ago, but to no avail. “A lot of people have strung me along saying they are going to invest and then they drop off,” said Rope, 46.
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“As a woman I think it is more difficult to raise investment because some men — and every man will deny this — do not respect a single woman in business,” she said.
Scale of turnover is also an issue, Rope believes. Despite being profitable from the outset, the business had modest sales of £160,000 this year. “There is a turnover vanity with investors,” she said. “They feel that if you are turning over millions you are a safe business.”
Rope may turn to crowdfunding or seek backing from female angel investors. Banks are no longer on her radar after a £10,000 loan fell through in 2009. “I had to put the money on my credit card [to pay for production] and I had bailiffs at my door,” she said.
However, she still hopes the right investor will come along and she is willing to part with a minority stake for £250,000 or give up control of the company for £650,000.
Monica Vinader, 48, a jeweller whose work is worn by the Duchess of Cambridge and the actress Kate Winslet, has raised close to £25m from private equity backers including Piper and Beringea. She set up the business with her sister Gabriela in 2007. The company, which has 180 staff, posted revenues of £19.8m last year.
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Vinader’s experience with investors has been largely positive. “If you can find an investor who shares your vision and ambition from the start, it will make the eventual journey smoother and more satisfying for both sides.”
There is no magic formula for female entrepreneurs, although the presence of angel networks and women-only investment funds is a help. While male investors could be more aware of their biases, more women should brave the challenge of pitching and explore the funding options available to them.