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The Fear of Debt: The Invisible Barrier to Start-up

Picture an entrepreneur.

The typical entrepreneur in the UK is white, male, aged 36 years old and has some kind of college degree¹.

Did you match up?

Or did you think of a woman? I wouldn’t blame you.

So many flashy stories of female CEOs and women-led businesses richly embroider the media, sparking hope that the gender gap may finally be a thing of the past: a historic epoch that we will look back on with teeth-gritted nostalgia.

But the numbers tell a different story: men remain twice as likely as women to engage in entrepreneurship².

What’s the huge deal with entrepreneurship, though? Isn’t it just a trend right now, that everyone’s releasing their inner special snowflake syndrome by drawing up hastily sketched start-up blueprints? Isn’t the desire to be the next Steve Jobs simply boundless self indulgence?

Not quite.

Entrepreneurship is the lifeblood of the economy³. Building an enterprise society by empowering small businesses triggers a chain reaction of socioeconomic benefits that is hard to dispute. Small businesses enrich societies by creating employment, boosting productivity and revitalizing communities.

Not to mention, entrepreneurship harbors particular value for women, offering a channel for

them to break through existing glass ceilings in the world of business⁴.

In other words, entrepreneurship is not just glitz and glam but rather, a necessary ingredient

for the recipe of a healthy, living and breathing economy. And a more equal one at that.

It is therefore high on the societal to-do list, to take a magnifying glass and Sherlock-Holmes

our way to identifying the key barriers to entrepreneurship that exist today. This need is

especially pressing in the UK, where the rate of entrepreneurship is just half that of the


The barriers facing budding entrepreneurs are not uniform: they are gender-specific. Men

and Women’s respective roadmaps to starting a business may seem the same at first

glance, but thanks to a ton of research, it’s safe to say that these are vastly differing


One big difference: the fear of debt.

While the fear of debt is the single largest barrier to entrepreneurship for both men and women, women are significantly more fearful than men⁵. To delve into the whys and wherefores, let’s take a step back and look at debt in the context of the bigger picture.

The truth is, debt just doesn’t sit right with most of us. For most of us, debt is a big bad word. For most of us, debt is something that should be avoided at all costs, a reluctant last resort, the stonewalled solution to an emergency.

That’s because debt, though inherently neutral, is tied up with emotion. It can be difficult to see debt as the gilded opportunity it is, when you’ve spent your life cutting corners and working two jobs to avoid its gaping jaws. It can feel like a step back, not a step forward.

Through education and the right mentorship, the fog of fear can clear; the realm of what’s possible expands. The cogs of that dusty old business plan, that you stashed in some obscure folder on your MacBook three years ago, can finally start to fall in place.

Let’s get right down to it. The fear of debt only exists, through the lens of “oh shit, what if it doesn’t work out”?

Think about it like this: if you knew for a fact, that everything would run just as you specify in your – now much less dusty– business plan, the prospect of debt would not incite fear, but rather a simple cost-benefit mathematical judgment. So, confidence is key.


Entrepreneurial self-efficacy is the belief in your ability to successfully start a business based on a personal assessment of your entrepreneurial skills⁶.

Findings show that women tend to feel less confident, on average, about their entrepreneurial ability relative to men. In fact, men are confident about their ability when they tick only 60% of boxes on the entrepreneurial checklist: they’ll just wing the rest.

Women are only confident when they tick every box⁷.

This confidence gap – another gap! Take a shot - is explained in part by systemic barriers in funding and the challenge of brushing against the grain of gender roles.

Just look at the data: a McKinsey report uncovered that men are primarily hired or promoted based on their potential while women are judged on their track record8.

Ultimately, the bar is much higher for a woman.

Cue the gradual erosion of confidence.


The extent of financial support and investment is a huge factor in how confident entrepreneurs are. Again, we see a difference in the investment flowing into male and female-led businesses. Only 1.9% of VC funding went to women-led businesses in 2022, which was, in fact, a significant drop from 2021 levels9. Lack of funding and access to funding is a major systemic challenge holding women back.

Gender roles

Society has instilled in us the binary that men are the risk-takers while women play it safe. This can be seen in the pattern that risk-taking women have to deal with worse consequences when they go wrong, than if men took those same risks10.

Risk-taking behavior for men: audacious and daring. For women: reckless and irresponsible in the clear-cut context of societal gender role prescription. People assume that entrepreneurs must be highly independent, aggressive and ruthless to get to the top – all attributes that are typically associated with men and, when shown in a woman, still garner reactions of dissonance and resistance11.

Society still isn’t ready for a ruthless woman.

Negative attitudes toward entrepreneurship form a significant barrier to start-up (Harding et al. 2002) and these remain to this day, to be especially true for women.

Understanding the barriers to entrepreneurship is vital in the effort to create an enterprise society. The emergence of gender effects on barriers, such as fear of debt, highlights the need to closer analyze the specific barriers that female entrepreneurs face in the road to start-up success.

A prominent barrier for women - both a precursor and consequence of fear of debt - is lack of funding. At the Global Collective, we believe that women and men should receive equal opportunity when it comes to funding their budding businesses. That’s why our mission is to close the gender gap by connecting women-led businesses with male-led investment firms to expedite the unfolding of their entrepreneurial potential.

The result?

One less systemic barrier disguised as a natural gender difference.


¹ Robertson, M., Collins, A., Medeira, N. and Slater, J. (2003), "Barriers to start-up and their effect on aspirant entrepreneurs", Education + Training, Vol. 45 No. 6, pp. 308- 316.

³ Baumol, W. J., & Strom, R. J. (2007). Entrepreneurship and economic growth. Strategic entrepreneurship journal, 1(3-4), 233-237.

⁴ Sullivan, D. M., & Meek, W. R. (2012). Gender and entrepreneurship: A review and process model. Journal of Managerial Psychology, 27(5), 428– 458.

⁵ Harding, R., Hart, M., Jones-Evans, D., & Levie, J. (2002). Global entrepreneurship monitor. London: London Business School.

⁶ Chen, C.C. , Greene, P.G. and Crick, A. (1998), “Does entrepreneurial self-efficacy distinguish entrepreneurs from managers?”, Journal of Business Venturing, Vol. 13 No. 4, pp. 295-316.

10 Morgenroth, T., Ryan, M. K., & Fine, C. (2022). The Gendered Consequences of Risk-Taking at Work: Are Women Averse to Risk or to Poor Consequences?. Psychology of Women Quarterly, 46(3), 257-277.

11 Vamvaka, V., Stoforos, C., Palaskas, T., & Botsaris, C. (2020). Attitude toward entrepreneurship, perceived behavioral control, and entrepreneurial intention: dimensionality, structural relationships, and gender differences. Journal of Innovation and Entrepreneurship, 9(1), 1-26.


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