The Roadmap to Investment for Female Founders

We recently held a fantastic breakfast session led by #iAlso100 Karen Holden, founder of A City Law Firm all about what legal matters female business owners should be thinking about. As a follow up, Karen has generously shared this article: The Roadmap to Investment for Female Founders.

Huge thanks Karen and hope you enjoy.

The Roadmap to Investment for Female Founders

Raising external investment is an important milestone for many businesses. It offers an excellent opportunity to accelerate growth and remove cashflow limitations.

Seeking investment can be a lengthy, tiring, and stressful process for any founder. Female founders though report an even harder time securing funding for their businesses. This isn’t just anecdotal; the data speaks for itself.

– 0.8% of VC funding was given to female led businesses in London

-At current rates, for all-female teams to reach even 10% of all deals will take more than 25 years (until 2045).

-Yet reports have highlighted that up to £250 billion of new value could be added to the UK economy if women started and scaled up new businesses at the same rate as men


As a female founder that set up A City Law Firm 15 years ago, I had no idea where to turn for advice & support. I had £5000, a suitcase of files and no clue. I was also asked by a potential legal partner ‘wasn’t I at an age where I would be considering a family ‘; I was starting out in a male dominated City & sector, so it was daunting. I didn’t let anything stop me though even where there were admittedly tears and battles to be had. If a door closed, I went on to another or bashed it down, but it was exhausting, sometimes demoralising and hard to stay motivated.

In more recent times, the huge amount of information available publicly online can make the startup process much easier. That said, this abundance of information presents a whole new set of challenges – you need to figure out where to start and who to trust. It’s easy to drown in information and advice from every direction.


I’ve spent some time reflecting about the differences in the way females are perceived and treated over time, asking myself what have we achieved so far?

Sometimes it feels like I’m having the same conversations about breaking down barriers as 15 years ago but looking bac, we’ve seen monumental changes and a snowballing movement – that said, there is still plenty more work to be done and barriers to break down. We’ve reached a level of widespread awareness of the issues and many of the barriers – the conversation now needs to shift to how we remove these barriers.

One question I’m frequently asked is why women need gender specific initiatives like the Female Founders Growth programme I launched a few years ago.

The simple answer is that men & women start at different positions in their founder journey. There is a common assumption that female founders are held back in their growth – in fact, female founders are disadvantaged before they even start. Gender bias is deeply rooted in our society, our education system, and our institutions. Women are given less opportunities to learn and use important skills for business. Simply removing barriers like access to funding, or access to networking events isn’t enough. Female founders frequently need an opportunity to get caught up and given the practical playbook that allows them to launch and scale. That’s why I create the Female Founders Growth initiative.

We want to improve the confidence of women and give them the resources and tools to thrive by partnering with experts – both men and women – who are proactive about supporting female founders and have a proven history of doing so.

As a lawyer who has advised hundreds of businesses getting ready to start, scale and seek investment right up until they exit, I can tell you that the process is never easy and there are always ups and downs, but the market is vibrant right now; investors are keen to enter the UK market and female founders are seeing more active interest than ever before.

If I had to condense down all my experience in a few important nuggets, here’s what you need to consider when trying to raise capital for your business.

  1. Look at your options

Many businesses turn to equity financing without exploring the different options which may be available. Frequently seen as the easy or ‘free option’, it’s an attractive choice but this is not necessarily the case. There are a huge variety of types of financing such as debt financing (where you do not give up a share of your business) – offered by both high street banks and commercial lenders. Also important to mention are government grants which are available to a much broader range of businesses than you might think. The UK government offers hundreds of these through organisations like Innovate UK. Businesses should also consider whether there is R&D relief available which can result in a cash payment based on funds you have spent on R&D and explore tax initiatives such as SEIS and EIS.

  1. Due diligence on your business

It is important that you look carefully at your business and company from the perspective of any potential investor. As part of any investment process, you can expect a degree of due diligence.  This often takes the form of legal, financial, and commercial due diligence.  The extent and volume of due diligence does depend on the amount being invested. It is however important to try and identify swiftly potential areas of concern. Look in the mirror and be prepared with concise, executed documents, answers to their tough questions and don’t forget above all to impress upon them your unique selling features, experience and passion.

Areas of legal due diligence can be summarised as being able to respond and address the following key areas:

  • Do you have signed and suitable contracts with all members of staff employed or otherwise. Do these have suitable confidentiality clauses; protects the businesses intellectual property and hold suitable restrictive covenants?
  • Do you have signed contracts or valid terms and conditions with all customers and your suppliers, are they consistent with processes and policies even invoice terms?
  • Do you have an agreement regulating the founders, a shareholder’s agreement is essential for any business?
  • Have all shares been properly allotted and transferred, and do you have shares to offer investors? How are these being allocated – dilution terms?
  • Have you filed everything at Companies House that should have been filed and are the articles up to date and allow appointments?
  • Has someone been promised something from the business, such as shares, which isn’t in writing or reflected at Companies House?
  • Who owns the intellectual property of the business and how can you prove this?
  • Have you got any consent or license or regulation you need to sell your product or service?
  • Have you registered and protected your IP?

This is just a taste of the legal questions and documents that could be requested from you, that should be carefully audited; updated and executed to protect the business.

  1. Is it the right investor?

So often founders neglects to consider whether the potential investor is a good or suitable fit for the business. We would encourage all founders carry out their own level of due diligence on any potential investor.  By selling shares in your business to someone you are creating legal rights and obligations to that shareholder. With any business there are the inevitable hard times and difficult conversations. Having a suitable investor who is a good fit for your business makes those conversations a bit easier.

There are many different types of investors and each fit different types and scales of businesses. Depending on the size and stage of the business this may be venture capital, private equity, angel investors, trade investors or friends and family.

Some of the due diligence you should be doing on any potential investor and questions you should be asking are:

  • what are the investors exit plans? Are they aligned to yours?
  • what are their and your expectations of a return?
  • what other companies are in the investor’s portfolio will they get you?
  • how involved does the investor want to be?
  • how experienced is the investor?
  • do they benefit from EIS have you considered this?
  • what demands are they making?
  1. Legal Documents

The documents you can expect to receive as part of an investment round is:

  1. A subscription agreement or investment agreement. This regulates the terms upon which the investor is putting the funds into your business. This is likely to include warranties or promises about the business and your company so these need to be carefully scrutinized.
  2. A shareholder’s agreement. This regulates the high-level operations and running of the business. It governs the relationship between the shareholders. This document typically includes ‘reserved activities’ or ‘investor consents’ which are the list of activities that the company can and cannot do without the consent of the investor. This is often a ripe area for negotiation.
  3. A disclosure letter. This deals with specific disclosures against any warranties to limit your liabilities for any relevant circumstances.

You may also receive updated service agreements (employment contracts) for the founders governing their role in the business and usually include provisions on payment and expectations on services.

In conclusion, the path for female founders seeking investment is challenging but filled with opportunities for those who persevere. Despite the hurdles, the resilience and creativity of women entrepreneurs shine brightly. Initiatives like the Female Founders Growth programme are crucial for providing the support and resources needed. The journey towards a more inclusive entrepreneurial ecosystem is underway, and with continued effort and support, we can accelerate the pace of change. For female entrepreneurs, your journey is not just about your own success, but also about paving the way for future generations, making every step you take incredibly impactful.