On the face of it, the boom in the internet economy was a leveller. It was one arena not regarded as a stomping ground for the Old Boy Network. But female entrepreneurs seeking finance for startups still often face greater obstacles than their male counterparts. "One investor told me, 'We found you terribly seductive but in the end we were not seduced'. It was so inappropriate," says Sonia Lo, CEO and co-founder of ezoka.com, an online business-to-business exchange. To add insult to injury, when she asked what business reasons they had for the refusal, the investor professed surprise that she should ask such an insightful question.
Ms Lo could have asked the question in six other languages. Since she graduated from Stanford University at the astonishing age of 18, she has raised more than $25.5m (£19m) of financing for UK internet ventures. Previous roles include heading the new media arm of United News & Media, reporting directly to Lord Hollick. Despite this track record, Ms Lo believes male venture capitalists presume stupidity when meeting women entrepreneurs. "Most of the time I just ignore it," she says. "There's always capital somewhere else."
Ms Lo's determination to raise finance is not unique among female business-owners. Arline Woutersz, president of the British Association of Women Entrepreneurs, says: "I had to sell my home to get finance. I told my husband, who was in Hong Kong then, that I needed his signature by proxy."
Tina Knight, MD of Nighthawk Electronics, founded her technology company in 1985. She had to visit 12 banks to raise the initial investment of £4,000, but within three years, sales turnover had risen to more than £2m. "If you can't find a good bank manager, find a good pawnbroker," she says wryly.
A report called On the Move: Women and Men Business Owners in the UK was a collaboration of the University of Strathclyde, the National Foundation for Women Business Owners and IBM. Its author, Dr Sara Carter, says that although a quarter of SMEs are owned by women, equating to 952,750 firms, there's a "statistically significant gap in capitalisation between men and women". She says: "Women are more cautious about asking for finance, but there's clearly a supply-side issue. One woman in the survey said she visited eight banks looking for an overdraft facility, which shows persistence. It's not about demand."
Julie Weeks, director of research at the National Foundation of Women Business Owners, says: "In the UK, women could make a great impact on the economy but they're being held back by obstacles to capitalisation." Kathryn Bullock, co-founder of the technology networking group E-women, adds: "The economy can't afford to ignore women." Karen Gill, a co-founder of everywoman.com, an online resource for women business owners, believes banks should take a serious look at the research. "They are missing an opportunity to grow the market," she says.
One of the key problems facing women entrepreneurs is the lack of female investors. In the UK, only 5 per cent of venture capitalists are women. "When time is tough it's easier to invest in someone comfortable, someone who looks and sounds like you," says Ms Lo. "This makes it 10 times tougher for women entre- preneurs in a tough market."
But Julie Meyer, co-founder of European hi-tech networking group First Tuesday and CEO and founder of Ariadne Capital, disagrees. "It's such a strategic asset to be a woman. You're more likely to get noticed as a 5ft10in blond American woman than as a native UK man."
And Inma Martinez, president and CEO of Escapevelocity, managed to raise £2.5m for her wireless startup when the market had crashed. "Sometimes the handicap is an advantage," she says. "In some cases, I've had success because I was a woman ringing their door. They don't see many women so they think it might be interesting."
Dinah Bennett, programme director for the Foundation for SME Development at University of Durham, believes traditional bank managers have a perception problem with women in business. She says women in the survey reported comments from their bank managers such as, "You'll only do this for a bit and then you'll go off and have children," or, "Can we have your husband's signature?"
Jennifer Mowatt, UK country manager of US online auction house eBay, says: "When I go to a meeting with my business development manager Paul everyone automatically assumes he's my boss. It's highly amusing." Although other commitments, such as children, may cloud a banker's judgement of a business-woman, the IBM research shows that availability and affordability of childcare was ranked lowest of all business issues. Women and men regarded maintaining business profitability as the most important issue. Childcare was rated important by 15 per cent of women and 4 per cent of men.
Indeed, flexibility in launching a business was cited as a key motivation by women entrepreneurs. Ms Weeks says: "Starting a business is a way of solving the childcare issue but it's sometimes used by others to minimise the power of female entrepreneurship."
One way to help female-owned businesses find funding would be for the Government to become more actively involved. And many women entrepreneurs will have watched keenly the rise of Patricia Hewitt. Her appointment as Secretary of State at the Department of Trade and Industry could signify increased government involvement in helping women in business. This is particularly likely. Ms Hewitt is also the new Minister for Women.
"Don't give us grants; there's too much bureaucracy," says Ms Knight. "Give us an interest-free loan. Take some equity in the company. In South Africa, a local bank supported women-owned businesses in a new initiative a few years ago. Every loan was paid back. Even those who went under continued with their payments, because they felt so grateful at being offered the opportunity."
So how could the Government close the gender gap for funding? Sue Lewis, deputy director at the Government's UK Women's Office, says: "The £75m incubator fund mentioned in the Knowledge Economy White Paper will be used in part to encourage women's businesses." The Government also wants to launch an online women's e-business centre in a few months.
In Glasgow, a business initiative to help fledgling women entrepre-neurs is being lauded as a template that could be rolled out across the country. The Wellpark Enterprise Centre (WEC) is the only dedicated women's business unit in the UK. "Until recently people were embarrassed to speak about gender in business," says Jackie Brierton, WEC's chief executive. "It's only now when the economic benefits are clear that we're able to speak about these issues."
First Tuesday's Ms Meyer rem- ains upbeat. "We're not hurting. It's tough but it's tough for everybody. We've risen to the forefront of what we're doing because we stand out."Reuse content