Hello, boys: why investing in women makes sense

Edie G. Lush

Edie G. Lush says women have a strong track record as entrepreneurs and managers, yet struggle to find support from Britain’s male-dominated venture capital community

Clearly her mettle paid off – Plum Baby raised £2 million from Octopus Ventures and Noble Fund Managers. Her product is now available in all major supermarkets and she expects her 2007 turnover of £3.5 million to double this year.

So if there’s a problem, what’s the solution? The government recently announced the creation of a £12.5 million fund which will be put aside to ‘specifically encourage more women entrepreneurs’. The proposed fund intends to give potential women entrepreneurs the basics of writing business plans, running a company and pitching for investment.

Money talks, but interesting examples of policy in action can be found in other countries. Norway is six years into its experiment in encouraging not only female entrepreneurship in small companies but also in large ones. In February 2002, trade and industry minister Ansgar Gabrielsen dropped a bombshell on Norwegian corporate life by stating that all companies listed on the Oslo stock exchange would be required to have 40 per cent of their boardroom positions held by women. If companies failed to address the gender imbalance, legislation would be introduced to enable companies to be prosecuted for non-compliance. In 2005 the percentage of women on company boards had risen – but not enough, to 24 per cent – so the threatened legislation was tabled. This spring the government announced full compliance.

While no study yet exists of the economic performance of these near-gender-equal companies by comparison with to their male-dominated predecessors, a recent survey of the new female board members showed that most of them have significantly higher educational and professional qualifications than many of the male colleagues they replaced, or now sit alongside.

In a recent interview with the Sunday Times, Ansgar Gabrielsen quoted the same McKinsey study used by Stargate Capital to justify his decision to bring women further towards the forefront of Norwegian entrepreneurial life. My bet is that we’ll be hearing a lot more in Britain about ‘investing in women’. Male chauvinists may be tempted lazily to dismiss it as Scandinavian-style political correctness, but the evidence says it makes remarkably sound business sense.

Edie G. Lush has been a reporter for Bloomberg, a political analyst for UBS, and is a regular contributor to The Spectator