Closing the ‘tiring’ funding gap lies with venture capital, says Propelle founder

Venture capital decision makers need to be the ones to close the funding gap, rather than creating solutions to navigate a broken system, the founder and CEO of Propelle has said.

The gender funding gap for female-founded businesses remains a persistent issue, with female-led companies receiving just two per cent of all venture capital funding.

Despite ongoing decisions, this figure has barely improved over the past decade.

Speaking to City AM, Ayesha Ofori, founder and chief executive of Propelle, called for radical changes in the VC sector, stating that the core issue lies within the money handlers.

“People who decide where the money goes are mostly men, and until that changes, we won’t see real progress”, she said.

Ofori believes that until more women hold positions of power within VC firms, the funding gap will remain as stagnant as it has been in recent years.

The statistics from the Women-led high-growth enterprise task-force report are stark, with only 18 per cent of high growth enterprises in the UK have a woman on their founding team, while 18 per cent of these companies are led by all-male teams.

In the first half of 2024, female founders received just £145m of the £8bn in equity investment, representing just 1.8 per cent of the total.

While initiatives such as Rachel Reeves’ recently announcing the backing of Invest in Women Taskforce are seen as a step in the right direction, Ofori remains sceptical.

“If all that money goes into existing VCs”, she said, “how will anything change?”. “They’re just pouring more money into people who will carry on not giving it to women”.

She also highlighted the potential for female angel investors to drive change, as her own start-up, Propelle, raised 70 per cent of its funding from female investors, many of whom were first time angels.

However, she stressed that relying on such angels wasn’t enough to combat the funding gap.

“We need more women angels, but also need to fix the traditional system. No one is addressing the real issue”, she stated.

Her insights reflect a broader call for structural change in the VC landscape, where many female founders are forced to bootstrap or seek alternative funding methods.

“Why should we have to create a new system for female investors instead of fixing the existing one?”, Ofori asked. “Its exhausting”, she added.

Her app Propelle, created by women and for women, was set up as a result of her frustration towards this persistent wealth gap and her experience with VC funding.

Having launched just last week, it is set out to empower and educate female entrepreneurs by helping them build capital and confidence in investing.

Designed to provide financial education, community support and investment tools, the app focuses on addressing this funding gap.

The demand for investment advice is reflected in its wait list of over 8,000 women.

“We found that women, regardless of their profession, often doubt themselves when it comes to investing. It’s a lack of confidence across the board”, she explained.