Back in April 2020, Emma Sinclair MBE, one of our Female Founders and Hephzi Pemberton started a petition calling on the HM Treasury to align the Future Fund with the diversity agenda. In their open letter to Rishi Sunak, they raised some serious concerns that the Future Fund could exacerbate existing inequalities for the UK’s diverse founders. Namely, that diverse founders are less likely to have raised at least £250k of funding already, less likely to have ‘warm introductions’ and therefore less likely to have access to the Future Fund.
In an article for Sifted, John Glen MP, Economic Secretary to the Treasury, signalled his commitment to ensuring the Future Fund did not only benefit established, male-dominated, London-based businesses. He said that the Fund would support female founders by becoming a signatory of the Government’s Investing in Women Code and provide monthly reporting on the diversity of recipients, including regional spread.
The British Business Bank has published its first set of data on the 252 companies who have been approved for matched-funding from the Future Fund.
So did the government’s efforts to support diversity work?
On a positive note, 79% of funding went to companies with mixed gender management teams. However, if we look at the data for all-women management teams, just 3 have received funding out of the total 252. By contrast, 66 all-male management teams received funding.
As Amy Lewin noted in her Sifted article on the Future Fund’s first set of diversity data, it is worth mentioning that the data applies to the ‘senior management team’ - not just founders. By contrast, when we track the equity funding gap, we only focus on startups with female founders. This means that the headline statistics are slightly more favourable for the government.
When it comes to ethnicity, 113 teams were of mixed ethnicity, 109 were all-white teams and only 12 were all-BAME.
On the diversity of the fund, Deborah Okenla, founder of YSYS said to Amy Lewin in her Sifted article that “it’s a positive start to see The Treasury commit to collecting and publishing the data. We can see from the data that we still have a long way to go. And we need to understand what the data shows for specific groups, such as black founders within the BAME categorisation, and move beyond binary gender.”
The Extend Ventures and YSYS Report on the impact of COVID-19 on Diverse Founders Startups revealed that almost half (48%) of BAME business owners did not expect to access or qualify for any government support schemes.
In our latest FFF Newsletter, we covered Erika Brodnock’s thoughts. Erika is co-founder of Extend Ventures and one of our Female Founders. Speaking to Amy Lewin from Sifted, Erika said “For too long, minority entrepreneurs have remained unsupported and have needed to ‘fend for themselves’... we need to ensure this isn’t going to be the same for newer businesses”.
So how can we change the status quo?
With support from Barclays, we are continuing in our efforts this year to provide female entrepreneurs with the support, advice and networks they need to succeed. We will be sending out invitations to our digital events in our FFF Newsletter, which you can sign up to here.
BAME entrepreneurship policy overlaps with some of our previous work on immigrant founders – and Sam Dumitriu has just written an excellent article making a powerful case for why we should let asylum seekers work – but, of course, it is also about British-born BAME entrepreneurs.
With support from NatWest, we’re also putting together an APPG for Entrepreneurship Webinar on BAME entrepreneurship. You can register your interest by dropping us an email. We hope and expect that this will be the start of some more focused policy work.