In 2021 female-led businesses attracted less than 12% of the 1.3 million investments made in UK firms. Similarly shocking is the fact that all-ethnic teams received just 1.7% of VC investment in the UK between 2009 and 2019. This is what is known as the “funding gap”. There is no one reason for this gap but biases, unconscious or otherwise, certainly play a part.

In July we ran two investment bootcamps, one for female-led businesses, the other for ethnic minority-led businesses. We welcomed founders from across London to our Croydon centre for a day of workshops led by business strategist and investor readiness expert, Neema Amin. While topics such as structure and content of a pitch deck are relevant for all founders looking to raise, the differentiator of these events came when the discussion turned to commonly asked questions from investors…

Research conducted by Professors Dana Kanze, Laura Huang, Mark A. Conley and E. Tory Higgins has shown that VCs will frame their questions differently to female entrepreneurs than to male ones. Observing Q&A sessions at a startup funding competition, researchers noticed that male entrepreneurs tended to be asked “promotion” questions (focused on goals and achievements) while women tended to be asked “prevention” questions (focused on responsibility and vigilance). Those entrepreneurs who had to field mainly prevention questions raised less (if any) investment than those fielding mainly promotion questions. They also noticed that the majority of entrepreneurs responded to questions in a way that reflected the way the questions were asked. However, those that were able to answer prevention questions with promotion answers raised more money than those who answered prevention questions with prevention answers. Being able to re-frame the question gives overlooked founders an advantage.

A particularly interesting finding was that the gender of the VC did not affect the bias of the questioning; female VCs were just as likely to ask prevention questions to female entrepreneurs as male VCs were. In recent years there has been an emergence of VC firms and Angel Networks that specialise in backing overlooked founders. This is obviously a positive step for diversity in business, however, the research suggests that diversity in investors does not necessarily benefit overlooked entrepreneurs. Awareness is key and it is important that founders are armed with the tools to flip the conversation. However, the focus should be on investors to challenge their biases if we want to close the gap.


If you’re in the process of raising, or thinking about making your first raise and are based in East Sussex (excluding Brighton and Hove) check out our next Investment Bootcamp:

Tue 11th October – Investment Bootcamp – East Sussex National Hotel, Uckfield