How to access femtech start-up funds in the UK

According to UENI’s 2020 report on gender and small business, 32.37 per cent of UK businesses are currently owned by women, up from 17 per cent in 2016.

While it demonstrates the gender gap in the British business world is closing (albeit slowly), what does it mean for femtech companies?

Access to funding

The 2019 Rose Review found that female-led businesses receive less funding than those headed by men at ‘every stage of their journey’. Not only does this inhibit scale up, it could put a stop to starting up in the first place.

According to the report, access to funding is the number one barrier listed, with ‘too big a financial risk’ being the second, showing that desire, fear and other personal responsibilities – while still important – are secondary to financial reasoning.

While funding is a barrier, this begins with lack of information and advice, even to the point of explanation around less obvious funding sources such as angel investment. More support from the very beginning would ensure they have a full understanding of the different options available, and the best one/s to suit them as entrepreneurs, as well as their enterprises’.

Although these figures are based on the business landscape in general, not specifically related to femtech itself, as women are most likely to set up femtech businesses, it gives a helpful understanding.

And it seems investors are catching on too.

According to Global Market Insights, the femtech market, which was valued at more than US$22.5 billion in 2020, is expected to grow by 16.2 per cent from 2021 to 2027, with other figures suggesting it will exceed US$60 billion within the next decade.

Funding sources

As Kevin Costner said in Field of Dreams: “Build it and they will come” – but just how true is that?

For many, the building (business creation, product development and testing) is not possible without funding, so clearly Kevin hadn’t tried launching a femtech business.

As a new business owner, the options, jargon, avenues and types of funding can be overwhelming, so it’s useful to seek advice from peers who already run established businesses to find out how they did it.

Do they have contacts who could help? Who did they secure funding through? Do they know of any business networks or support providers that can help point you in the right direction?

Online resources such as Swoop can help clear the jargon, and also list the variety of funds available for businesses at different stages.

If you’re looking for a more personal approach, get in touch with funding companies such as Nudl. They have specialist teams on hand to listen to you and your needs, identify opportunities and take you through the entire application process to make sure you’re not only applying for the right funding, but saying the right things in the process – not matter what your niche.

Want a more online experience? Try Nerdwallet for a process similar to applying for a credit card. It’s not as personal, but gives you a quick decision and often fast funds.

Angel Investment

While saying you’re looking for your angel may sound strange in a business context, they can often be the saviours you didn’t know existed.

Often high-net-worth individuals, angel investors fund start-ups at the early stages, often with their own money, and usually for businesses they have a personal or passionate connection to.

One such investor is Bérénice Magistretti with Visionaries Club. A tech journalist turned investor, she is fascinated with the femtech space and even writes a regular column for Forbes about ‘Tech That Matters’ – largely focusing on topics that include femtech and accessibility.

She has made dozens of investments from $100k to US$5 million and knows that the world isn’t going to change overnight, but great initiatives have been created to get things moving.

Bérénice is one of many angel investors ready to support businesses they believe in, and who often bring with them a wealth of experience and knowledge that can help with various parts of the business, from marketing and branding to HR and scaling up.

So, while some may wish to remain silent and simply fund a business, always consider what other support you could gain from those involved in your business.

Crowdfunding

An underrated yet growing funding source is crowdfunding – the use of small amounts of capital from a large number of individuals.

And while you could be tempted to think that relying on so many people is a risk, it is possible.

Sextech pioneer MysteryVibe reached 127 per cent of their fundraising goal from over 530 investors for their first ever campaign which will go towards new product development, research, team expansion and inventory building.

While not a start-up, this success story does demonstrate that there are people out there willing and able to support businesses that they believe in. And crowdfunding gives them the opportunity to do so – and be involved – without the need to spend significant sums that they may not have access to.