New research from Evelyn Partners reveals a staggering 25% valuation gap between male and female entrepreneurs during business exits, highlighting persistent structural barriers facing women founders in the UK entrepreneurship ecosystem.
Women Founders Face Significant Exit Valuation Disparity
Evelyn Partners’ groundbreaking Next Exit report demonstrates that women entrepreneurs achieve substantially lower valuations than their male counterparts. Specifically, male business owners secure an average of £5.2 million at exit compared to just £3.9 million for female founders. This 25% gap underscores systemic challenges that persist throughout the entrepreneurial journey.
Structural Barriers Impacting Women Founders
Alison Fitzsimons, Head of Entrepreneurs Business Development at Evelyn Partners, identifies several critical factors contributing to this disparity:
- Funding access limitations for scaling operations
- Negotiation bias during exit processes
- Venture capital distribution favoring male-led businesses
Less than 2% of venture capital funding and only 3% of overall equity capital in the UK reaches women-led businesses.
Psychological Toll on Women Entrepreneurs
The research reveals significant emotional impacts on female founders during exit processes. Notably, 65% of women report high stress levels compared to 47% of men. Additionally, women are 15% less likely to express satisfaction following business sales. These findings suggest the valuation gap extends beyond financial outcomes to affect overall well-being.
Systemic Solutions for Women Founders
Industry leaders emphasize the need for comprehensive support systems. Caroline Macgregor of Up-Scale consultancy notes that challenges persist throughout the entrepreneurial journey. The No Diversity, No Deal initiative aims to create supportive communities that address perennial issues facing women entrepreneurs. This includes improving access to resources, unlocking potential, and building confidence in decision-making.
Call to Action for Investment Community
Business leaders urgently recommend increased investment and advisory support for women founders across Scotland and the UK. Systemic change requires collective effort from investors, advisers, and the broader business community to address the valuation gap and create more equitable outcomes for all entrepreneurs.
Frequently Asked Questions
What is the exact valuation gap between male and female founders?
Male founders secure £5.2 million on average at exit compared to £3.9 million for female founders, representing a 25% disparity.
What percentage of venture capital goes to women-led businesses?
Less than 2% of venture capital funding and only 3% of overall equity capital in the UK supports women-led businesses.
How does the exit process affect women entrepreneurs differently?
65% of female founders report high stress during exits compared to 47% of men, and women are 15% less likely to be satisfied post-sale.
What initiatives address this gender valuation gap?
The No Diversity, No Deal event series brings together business leaders and advisers to drive meaningful change and create supportive communities for women entrepreneurs.
When will the full Next Exit report be published?
Evelyn Partners will publish the complete Next Exit report in October, providing comprehensive data on exit valuation disparities.
