The Short Read
- The UK Government says that investing in Women Code signatories has outperformed the wider market in supporting female founders for six consecutive years.
- The Code has grown from 12 signatories in 2019 to more than 330 organisations, including retail banks, venture capital firms, angel investors and lenders.
- In 2025, 33% of VC deals by Code signatories went to companies with at least one female founder, compared with 25% in the wider equity market.
- Women-led businesses were as likely as male-led businesses to have a loan or overdraft application approved. Still, they were less likely to use finance and more likely to borrow smaller amounts.
- Angel groups with 30% or more women investors made 98% of all their investments in teams with women founders, showing how investor representation can influence funding outcomes.
Backing female-led businesses is now a growth argument
For years, the funding gap for women entrepreneurs has been discussed as a fairness issue. It is that, of course. But the latest UK research gives investors a sharper business reason to pay attention: backing female-led businesses is linked to better growth opportunities, wider deal flow and a stronger entrepreneurial economy.
The UK Government’s 2026 update on the Investing in Women Code says signatories have directed a greater proportion of funding to female-founded businesses than the wider market for the sixth year in a row. The Code is a government-backed commitment designed to improve access to finance for women-led businesses, and its membership has grown from 12 signatories in 2019 to more than 330 organisations today.
That growth gives the data weight. This is no longer a small conversation between a few inclusion-minded investors. It is a broader funding-system experiment in transparency, data, and accountability.
The report does not say the funding gap has disappeared. In fact, it shows the opposite in several areas. Women-led businesses still receive a small share of overall investment, borrow less, request smaller amounts, and often lack access to the networks that open doors to investors.
The progress is real. The gap is real, too. That is exactly why the report is useful.
What the Investing in Women Code does
The Investing in Women Code was launched in 2019 after the Rose Review identified access to funding as one of the biggest challenges for women-led businesses in the UK. The Code asks signatories to improve female entrepreneurs’ access to finance, nominate a senior leader responsible for equality in entrepreneur interactions, and provide annual gender-disaggregated funding data. That last part is crucial.
Finance often hides behind pipeline language. Investors say they do not see enough women-led companies. Lenders say applications are lower. Founders say the process is harder. Without data, each side can stay inside its own version of the story.
The Code forces a clearer view.
Its 2026 annual report says that over six years, it has built one of the UK’s most comprehensive evidence bases on gender and access to finance. It also says the Code has moved the conversation from anecdote to evidence, from evidence to accountability, and increasingly from accountability to action.
For investors, this is the first lesson: measure the gap before making claims about the pipeline.
The strongest finding: Signatories outperform the wider VC market
The clearest growth signal comes from venture capital.
In 2025, 33% of VC deals by Investing in Women Code signatories went to companies with at least one female founder. In the wider equity market, the comparable figure was 25%. The report says signatories have outperformed the broader market on the number and value of investments going to teams with at least one female founder for six consecutive years.
There is also a useful detail inside the 33% figure. Of VC deals by signatories, 8% went to all-female founder teams, and 25% went to mixed-gender teams. The overall share rose by two percentage points from 2024 to 2025, driven by a higher share of deals to mixed-gender teams.
The report’s longer-running signatory cohort shows an even stronger pattern. Among 21 signatories that have consistently reported data since 2020, 37% of deals in 2025 went to companies with at least one female founder, outperforming all Code signatories and the wider market.
That is where investors should pause.
The data suggests that when organisations commit to tracking gender, improving practices and staying with the process over time, investment outcomes can shift. Female founders are not missing from the market. The market has to improve how it finds, evaluates and backs them.
Debt finance shows approval is possible, but ambition is still constrained
The debt finance findings add a different layer.
The report’s summary says women-led businesses are as likely as male-led businesses to have a loan or overdraft application approved. That is encouraging. Approval itself may not be the biggest barrier once women-led businesses apply.
The challenge appears earlier and on a larger scale.
A gender analysis of SME Finance Monitor data found that women-led businesses were less likely to use finance or borrow more than £25,000 when they did. In 2025, 37% of women-led businesses used finance, compared with 49% of male-led businesses. Women-led businesses were also more likely to be permanent non-borrowers: 48%, compared with 38% of male-led businesses.
This is one of the most important findings in the report.
- A founder who never applies for financing cannot be approved.
- A founder who applies for a smaller amount may grow more slowly.
- A founder who avoids external finance may do so because of confidence, risk perception, prior experience, a lack of advice, unsuitable products, or limited networks.
It connects directly with the Indian context, too. Change in Content has earlier written about why complex business loans remain a barrier for women entrepreneurs and why the loan journey for women entrepreneurs needs better design. The UK data strengthens the broader point: access to finance is not only about whether capital exists. It is also about whether women founders feel able, informed and supported enough to use it.
Angel investment shows representation changes who gets funded
The angel investment chapter may be the most telling section for investors.
The report says angel groups with 30% or more women investors made 98% of all investments in teams with women founders. It covers all-women and mixed-gender teams. Angel groups with less than 15% women investors made 77% of their deals in all-male founder teams. That is a powerful signal.
Investor rooms shape funding outcomes. Who sits in those rooms affects what is noticed, what is understood, what feels investable, and which founder stories receive patient questioning instead of quick dismissal.
The same chapter shows both ambition and friction. All-women founder teams requested 25% higher equity levels than their male counterparts. The average funding sought by all-female teams rose to about £941,000, compared with about £865,000 for all-male teams.
At the same time, all-women founders captured only 11% of total equity investment from angel groups, while all-male teams captured 67%.
The message is clear. Women founders are ambitious. The capital flow has not fully caught up.
Networks still decide too much
The report’s VC findings also point to the importance of warm introductions. Most funded VC deals came through warm leads, but all-female teams had a lower share of deals through warm introductions than mixed-gender and all-male teams.
This may sound like a soft issue. It is not.
A warm introduction can decide whether a pitch deck is opened, whether a founder receives a meeting, whether a partner spends time on the business, and whether early scepticism turns into serious diligence.
When women founders have weaker access to investor networks, the funding gap begins before valuation, product or revenue is discussed.
That is why investors seeking better returns from diverse businesses should not passively wait for founders to arrive via familiar routes. They need active sourcing, open office hours, women-led founder networks, operator referrals, accelerator partnerships and better follow-up systems.
Why this should motivate investors
The research should encourage investors because it does not frame women-led businesses as a concession. It frames them as an underused growth opportunity.
Code signatories are outperforming the wider VC market in backing teams with women founders. Women-led businesses show signs of growth, with SME Finance Monitor data cited in the report indicating they were as likely as male-led businesses to have grown or be planning to grow, and slightly more likely to have innovated.
Investors should take three ideas from this.
- First, there is investable ambition among women founders. The angel data show that all-women teams request a higher average investment than all-male teams.
- Second, better data and better processes can improve outcomes. The Code’s consistent signatories outperform the wider market, suggesting that sustained practice change can influence capital allocation.
- Third, decision-maker diversity matters. Angel groups with a higher share of women investors are directing more of their investments to teams with women founders.
For funders, the commercial case is practical: widen the lens, and the opportunity set expands.
What investors can do now
The report’s findings point towards actions that investors, banks and accelerators can begin using immediately.
- Track gender-disaggregated data. Measure who applies, who gets meetings, who reaches the investment committee, who receives funding, who gets follow-on funding and who drops out of the pipeline.
- Review sourcing channels. If most funded deals come from warm introductions, ask who has access to those introductions and who is left outside.
- Diversify investment committees. The report shows that representation inside investor groups can influence outcomes. The answer is not token presence. It is real decision-making power.
- Offer funding-readiness support without diluting standards. Women founders do not need easier questions. They need equal access to investor expectations, metrics, language and networks.
- Build follow-on pathways. Early cheques help, but the scale depends on continued capital. The report shows improved access to follow-on funding for teams with at least one female founder among signatories.
- Question smaller borrowing patterns. When women-led businesses borrow less, lenders should examine product design, advice, security requirements, confidence gaps and outreach.
- Back women fund managers. The UK Government notes that the British Business Bank committed £90 million through the Investor Pathways Capital Programme to ten new funds, with women making up more than half of the General Partners in the cohort.
What this means beyond the UK
The research is UK-based, but the lesson travels.
In India, women-owned MSMEs remain a major growth opportunity, especially when linked to finance, digital tools, markets and formalisation. Change in Content has earlier examined the scale and challenges of women-owned MSMEs in India, where access to suitable credit remains one of the biggest enablers of growth.
The UK experience offers a useful model: do not depend only on speeches about women entrepreneurs. Build a reporting system. Ask banks, funds, angel groups and public capital providers to track gender outcomes. Publish patterns. Identify gaps. Study who is improving. Make the data harder to ignore.
Countries that want more women entrepreneurs need more than founder motivation campaigns. They need capital systems that notice women-led businesses early, evaluate them fairly, and back them through growth.
The Change in Content view
Backing female-led businesses should be seen as an economic growth decision.
The latest Investing in Women Code data shows that when lenders and investors commit to measurement, transparency and better practice, funding outcomes can improve. Signatories are outperforming the wider VC market. Women founders are showing ambition. Women-led businesses are growing, innovating and seeking capital.
The unresolved part is equally clear.
Women-led businesses still receive a smaller share of total investment. They use finance less. At the same time, they borrow smaller amounts. They often have weaker access to the networks that influence investor attention. Angel data shows that ambition among women founders does not automatically convert into equal capital.
For investors, this is the opportunity. The next high-growth business may already be in the market. It may be building revenue, solving a real problem and asking for capital with discipline. The question is whether the funding system is designed to see it.
Women-led businesses do not need sympathy capital. They need serious capital, serious diligence and serious belief in their growth.
FAQs
Q: What does backing female-led businesses mean?
A: Backing female-led businesses means giving women-led companies access to finance, investment, credit, networks, mentoring and growth support so they can start, scale and compete.
Q: What does the UK research show about female-led businesses?
A: The 2026 Investing in Women Code report shows that Code signatories have outperformed the wider VC market in funding teams with at least one female founder for six consecutive years. In 2025, 33% of VC deals by signatories went to companies with at least one female founder, compared with 25% in the wider equity market.
Q: Are women-led businesses less likely to get loans approved?
A: The report’s summary says women-led businesses are as likely as male-led businesses to have a loan or overdraft application approved. The wider challenge is that women-led businesses are less likely to use finance and tend to borrow smaller amounts.
Q: Why do investor networks matter for women founders?
A: Warm introductions are a major route into funded deals. The report found that all-female teams account for a smaller share of deals through warm introductions, which may contribute to a lower share of funding.
Q: What can investors do to support female founders?
A: Investors can track gender data, diversify investment committees, widen sourcing channels, reduce dependence on closed networks, support women fund managers, and create clearer follow-on funding pathways.
Editorial Note and Sources
This DEI Insights article by Change in Content is based on the UK Government press release on the 2026 Investing in Women Code findings and the Investing in Women Code Annual Report 2026, published by the UK Department for Business and Trade. The article analyses the report’s findings from a women-and-work perspective and uses them to discuss why investors should take women-led businesses seriously as growth opportunities. It does not present independent investment data and should be read as an editorial analysis of the published research.
Sources used
- UK Government press release, “Research shows backing female-led businesses is good for growth”
- UK Department for Business and Trade: Investing in Women Code Annual Report 2026.
- UK Department for Business and Trade: Investing in Women Code Annual Report 2025.
