Nine firms from across Scotland are taking part in a first-of-its kind programme to help bridge the gap in access to funding by female-led businesses.

Lynn Mann of Midlothian-based Supernature Oils is among those taking part in the pilot project developed by Women’s Enterprise Scotland (WES) with support from the Royal Bank of Scotland and the Productivity Institute. Running from now until the end of November, the businesses are looking to raise anywhere between £2,000 and £25,000 on a new crowdfunding platform that forms part of the Women’s Business Centre portal, the digital platform launched by WES during the pandemic to provide support to female entrepreneurs.

Carolyn Currie, chief executive of WES, said improving access to funding has repeatedly been identified as critical in creating a more gender-equal economy.

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Research has shown that women currently launch businesses with 53% less capital than men. Meanwhile, the British Business Bank reports there has been no improvement in the share of venture capital investment received by female founders during the past decade, with the figure still standing at just 2%.

“I do think in this day and age people perceive things to be more equal than they actually are in terms of enterprise participation,” Ms Currie said. “The first thing to say is women-led business are still just one in five of every business in Scotland, so there is still quite a significant gender gap in participation.”

She added: “If women are starting up their businesses under-capitalised from day one, there’s a challenge already in terms of how you manage to achieve your sales, grow your profit margin, and trying to grow your income to then re-invest back in your business and get that initial momentum going.

“Coupled with that, there is a lack of funding available to businesses in general in the start-up market. Equity investors are often looking for evidence of sales and momentum achieved. If you are struggling to get started you can’t really evidence that shoot-up momentum that will attract investors because you need some capital in order to do that, so there is a bit of chicken and egg going on there.”

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The platform operates as rewards-based crowdfunding and is open to all on the Women’s Business Centre portal. In exchange for donations participants will receive non-financial rewards such as goods or services at a later date.

This is less regulated than equity-based crowdfunding, but Mr Currie said there are other advantages as well.

“Actually what we discovered with our research is that reward and donation crowdfunding is an area of raising funding where women do very well,” she said.

“There is research that shows women have outperformed men in terms of terms of success in these types of crowdfunding campaigns. The research has also shown that women are prolific as donors to these campaigns. For many people, men and women, the structure of crowdfunding offers a way to support women who are trying to start up and grow their own businesses.”

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Ms Mann at Supernature Oils is looking to raise £25,000 to help fund a £50,000 fully automated bottling line for her cold-pressed and infused rapeseed oils from a family-run tenanted farm in Gorebridge.

Having the opportunity to take part in this pilot allows Supernature Oils the chance to access finance which we need to unlock the next stage of our growth,” Ms Mann said. “There is no doubt that a gender-specific crowdfunding platform has been long overdue, it is yet another way to make finance more accessible to women led businesses whilst at the same time providing tailored support and advice.”

The Productivity Institute will assist in evaluating data collected from the initial four-week pilot to refine the crowdfunding platform before it is formally launched to all next year. WES also intends to meet in January with potential debt end equity funders to determine what evidence from the site they could use to support the case for further investment.

“As an independent party we can pull that out and say this is what our data is saying, so it gives [the businesses] that extra bit of value to take to follow-on funders and investors,” Ms Currie said.