The author of this article argues that the rise of female angel investors is not just a matter of equity, it is a critical driver of UK growth.

The following article examines the role that high net worth women play in driving UK economic growth. Given that UK growth has been anaemic, relatively speaking, in recent years, there is certainly a need to find solutions to ensure that all sources of capital are tapped. Using the capabilities of HNW individuals, including women who hold significant capital, is therefore an urgent need. As reported here a few days ago, HNW individuals and family offices have played an increasingly important role in corporate mergers and acquisitions, for example. 

A significant problem is that female-founded businesses miss out on much of the equity funding. Hannah Bernard (pictured), co-chair of the Invest in Women Taskforce and head of Business Banking, Barclays, considers the nature of the challenge, what to do about it, and the outlook. 

The editors are pleased to share these views; the usual editorial disclaimers apply. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Across the UK, declining levels of investment confidence are threatening to stifle the growth of businesses. Given that all-female founded teams received just 2 per cent of all UK equity investment in 2024 (Beauhurst) it’s likely that they will feel the brunt of this decline. 

As investors become more risk-aware and capital flow is reduced, biases mean that women will face even greater difficulty in securing the funding they need to start and scale their businesses. The two need to be tackled together: female founders present a significant, untapped economic opportunity, and if women were to start and scale businesses at the same rate as men, it could add £250 billion ($336.4 billion) to the UK economy (Rose Review). With the government’s ambitious Industrial Strategy now launched, setting out a new economic approach to backing the UK’s strengths, this is the time to change the story. 

This issue is not confined to one stage of the investment journey but persists across the entire ecosystem. One area that deserves particular focus is angel investment: angel investors play a critical role in providing early-stage funding, often providing one of the first substantial injections of capital into businesses. 

However, the unfortunate reality is that the angel investment landscape is far from equitable. Only 14 per cent of angel investors in the UK are female (UKBAA). This disparity has far-reaching consequences. We know that women are twice as likely back a woman than a male investor, so fewer female angels mean fewer women-backed businesses – it’s a feedback loop we urgently need to break (Kauffman Fellows).

Addressing this will not only put female-led businesses on a more equal footing; it is a commercial and economic imperative. Getting more high net worth women engaged in angel investing represents unrealised potential that could drive innovation. But many have never been asked – or equipped – to consider angel investing as part of the way they use their wealth and power.
 
A report by the UK Business Angels Association found that the top barriers to investing for females were a lack of awareness and access to information, a lack of opportunity to meet entrepreneurs, misconceptions of what angel investing is, and the perception that angel investing is far too risky and reserved for the extremely wealthy (UKBAA). 

Until we combat these barriers, we risk missing out on the significant contributions that female entrepreneurs and investors can make to the UK’s business landscape.

So, what needs to be done?
Last year the Invest in Women Taskforce, in partnership with The Entrepreneurs Network, identified the key barriers in preventing more women from becoming angel investors in the UK. The report found that angel syndicates offer an important route for women considering angel investing – providing vital education as well as community, support and facilitating a lower investment ticket size. Yet awareness and accessibility remain limited, particularly outside London. 

On top of that, awareness of tax relief schemes like the Enterprise Investment Scheme (EIS) and SEIS remains low amongst both investors and entrepreneurs. Despite their potential to incentivise early-stage investment, 90 per cent of female angel investors weren’t made aware of SEIS or EIS by their financial advisor (EHE Venture Studio). 

Additionally, smaller, regional female-led angel groups often struggle to access co-investment programmes which tend to favour well-established, venture capital-style entities in financial hubs. It is estimated that over half of angel investors are based in London or the South East, leaving many parts of the UK underserved (British Business Bank).

To drive meaningful change, we need to normalise angel investing for high net worth women as part of a modern wealth portfolio. Secondly, we must raise awareness of schemes such as SEIS/EIS – through collaboration between the government, angel networks and financial services firms – to demystify the process and promote these incentives more proactively to women with capital. 

But we need more – we need to create a more inclusive investment ecosystem. It was positive to see the recent focus on the British Business Bank’s Angel programmes via the Chancellor’s Industrial Strategy: the expansion of the bank’s Regional Angels Programme to help reduce regional imbalances in access to early-stage equity, and the expansion of diverse angel networks through new Angel Syndicate Support and Embracing Diversity programmes.

These are crucial for delivering operational support and opening the door to more underrepresented angel investors. We need more like this across the country to help foster diverse investment communities, because by addressing these structural challenges, we can unlock the full potential of female investors. 

The rise of female angel investors is not just a matter of equity; it is a critical driver of UK growth. By increasing the number of women participating in angel investing, we can unlock new opportunities for female entrepreneurs and strengthen the UK’s business ecosystem. The time to act on this is now. 

About the author
Hannah Barnard became head of Business Banking for Barclays UK in April 2020, leading a team of over 3,000 colleagues to provide support to one million small and medium enterprise (SME) founders to grow and scale their businesses. She joined Barclays in 2015 as the chief financial officer for Personal Banking before running the mortgages business for three years. She has previously held a range of leadership roles at Sainsbury’s and Sainsbury’s Bank. She is also co-chair of the government-backed, industry-led Invest in Women Taskforce and Exec sponsor for the Barclays UK Colleague Council and the Autism Focus Group. She remains an ally of the Barclays LGBT+ employee resource group, Spectrum.