Time to say if there’s no diversity, there’s no deal

For all the progress that has been made supporting women in the workplace, the challenges seem to remain the same. While the number of new businesses founded by women reached a record 164,000 in 2023, according to figures released earlier this year, the fact that this represents just 18% of the total illustrates the longstanding barriers female entrepreneurs have had to contend with.

But perhaps the most visible challenge is the perennial lack of female representation in senior positions, more generally. Research earlier this year showed that while there are positives to take from the fact that women have nearly 45% of board positions, the number of FTSE 350 CEOs fell to just 19.

Figures like these illustrate why nearly three years ago, along with Alison Fitzsimons and Jane Stewart, I decided to establish No Diversity, No Deal. Born from the frustration of a dealmaking awards ceremony with barely any female representation, it is a collective aiming to rewrite the rules of engagement by demanding that diversity is a non-negotiable in investment decisions and business leadership.

Research found female-led companies averaged revenues of £10.4 million (Picture: Adobe)

Despite the fact that there is plenty of research extolling the benefits of more balanced leadership teams, the hard truth is that there are still far too few female founders, investors, and deal advisers. Just under 20% of company leaders, a similar percentage of senior finance professionals, and 27% of investment professionals are women in the UK. Even among the business angels scene, only 14% of the UK's investors are female.

Those statistics lead to a range of imbalances throughout the investment lifecycle. At the very beginning, it is far too difficult for female founders to raise capital. World Bank research shows female-led businesses receive less than 3% of global venture capital – dropping to just 2% in the UK. When it comes to exits, Evelyn Partners’ Next Exit report reveals that women-led businesses exit for, on average, 25% less than their male-led peers.

Yet, when they are successful in attracting investment, study after study shows female-led businesses are often more effective and more profitable. One piece of research found that female-led companies averaged revenues of £10.4 million compared to £6.1 million for male-led equivalents.

Outcomes like these are symptoms of structural barriers – from unequal access to funding to negotiation bias that undervalues female leadership. While they persist, investors are leaving value on the table and founders are being shortchanged, and the entire ecosystem suffers as a result.

It has been incredibly encouraging to see how much has changed since we launched No Diversity, No Deal – last month we held our ninth event and the energy in the room was palpable.

And even in that short time the number of senior roles we work on at Livingston James filled by women – whom, it’s important to say, were all appointed on merit – has increased from around 8% to 40% since launching this initiative three years ago, helped in no small way by them being able to see more people like themselves in similar positions.

Nevertheless there is absolutely more that needs to be done. In investment, capital flows shape the future, and that is why diversity cannot be optional – we need more women involved in making deals happen, whether as entrepreneurs or advisers, acting as role models for future generations and dismantling the barriers that perpetuate inequality.

It is the responsibility of the entire ecosystem to work towards that and drive positive action. That’s why No Diversity, No Deal should not just be a mantra – it needs to become a mandate.

Sophie Randles, director at Livingston James