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20 Dec 2021

UK’s female entrepreneurs book £6.4bn in profits from selling their businesses

UK female entrepreneurs made £6.4bn from selling their businesses in the last year*, up from £5.1bn three years prior to that, shows a new study by Boodle Hatfield, a leading private wealth law firm.

However, despite the growth in the value of the businesses sold, sales by female entrepreneurs they still only comprise 22% of businesses being sold**. Male entrepreneurs, by contrast booked profits of £22.2billion in the same period.

Kyra Motley, Partner at Boodle Hatfield says that the gap between female and male entrepreneurs should close if the financial services industry continues to invest in initiatives to even the playing field in areas such as lending and VC funding.

Gender lens investing, for example, is seeking to improve on the 2.3% of venture capital investment going to female led businesses in 2020***. Gender lens investing includes:

  • Investing in women-owned or women-led enterprises
  • Investing in enterprises that promote workplace equity (in staffing, management, boardroom representation, and along their supply chains); or
  • Investing in enterprises that offer products or services that substantially improve the lives of women and girls

A number of venture capital funds have been established with a mandate to focus on female entrepreneurs. Angel Acadame, the angel investor organisation, focuses on tech companies where at least one of the founders is a woman. BBG Ventures targets businesses with female founders.

A number of major banks to have introduced internal schemes to promote lending to female owned businesses,

Kyra Motley, Partner at Boodle Hatfield, says, “Women business owners make up an increasingly important part of the British economy. These new figures show that the value of the businesses that they are founding is growing dramatically.”

“We have seen an increased focus on women-led tech and fintech businesses, amongst lenders and venture capital trusts. Those are critical areas for the UK economy and historically sectors where women had less participation than men. It is hoped that their successes in these sectors will help encourage more women and girls to get into STEM and help them realise their entrepreneurial ambitions.”

Boodle Hatfield says it’s important that entrepreneurs seek professional advice in advance of selling their business to take advantage of available reliefs, otherwise they could be overpaying tax on the sale of their businesses.

Kyra Motley continues, “What female entrepreneurs should do is ensure that they seek professional advice at all stages of their business life cycle, to maximise investment opportunities, and value on exit.”

Profits business owners have made from the sale of part or all of their company

* 2019/20 tax year, most recent year available
** Based on HMRC data
*** Crunchbase, global survey

This article was first published in CityAM on 20th December 2021.