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The FCA's New Criteria for High-Net-Worth Individuals: A Step Back for Diversity and Inclusion

On 31st January, the Financial Conduct Authority (FCA) in the United Kingdom is set to implement revised criteria for classifying individuals as high-net-worth (HNWI). This adjustment, which raises the income threshold from £100,000 to £170,000 per annum, is more than a mere regulatory update; it's a reflection of ongoing systemic issues, notably the gender pay gap, and its repercussions on the funding landscape for underestimated founders. Far from advancing the cause of diversity in investment, this regulatory change seems poised to undermine it further.

The Disproportionate Impact on Women

The attached image that has been circulating highlights the stark reality of this change, particularly its disproportionate impact on women. Despite women constituting 51% of the UK's population, they represent a mere 14% of angel investors, according to data from the UK Business Angels Association (UKBAA). This discrepancy is not just a statistical anomaly but a reflection of deeper, systemic inequities that the FCA's new rule threatens to exacerbate. To get more insights from the creators of the image, click here.

The Vital Role of Female Investors

Research underscores the pivotal role female investors play in bridging the funding gap for women-led startups. Female investors are twice as likely to back startups with at least one woman on the founding team and three times more likely to invest in startups with women CEOs. This isn't merely about promoting fairness; it's about recognising and leveraging the distinct value these companies bring to the market. Boston Consulting Group's findings reveal that companies with female founders generate 10% more cumulative revenue over five years, despite receiving only 2.3% of total VC funding.

A Call for Re-evaluation

The FCA's decision to raise the HNWI threshold could significantly reduce the number of qualifying women investors across England, with projections suggesting a reduction of 69-100% in various regions. This shift not only represents a setback for gender equality but also for the broader startup ecosystem that benefits immensely from diverse perspectives and inclusive investment practices.

As an advocate for sustainable and inclusive business practices, we urge a re-evaluation of this regulatory change. Our goal should be to enact regulations that act as catalysts for diversity and inclusion, driving progress rather than impeding it. The new criteria do little to protect the vulnerable or to capitalise on the unique contributions that women bring to the investment table.

How Diversity-X is Responding

In light of these changes, Diversity-X is committed to supporting angel investors who may find themselves sidelined by the new HNWI criteria. Our approach is straightforward yet impactful:

  1. Subscribe to the DX Sophisticated Investor Club: Begin your journey by joining our private network.

  2. Undergo Training: Spend the first six months engaging in self-paced angel investor training, supplemented by regular online group sessions and in-person events.

  3. Graduate to the Diversity X Angel Syndicate: Gain access to our deal flow upon completing six months of membership.

  4. Expand Your Network: Join other angel groups and start identifying as a self-certified sophisticated investor, particularly when applying to crowdfunding platforms or other angel groups.

  5. Make Investments: Begin making angel investments and contribute to fostering a more diverse and inclusive startup ecosystem.

Join Us

We're inviting interested parties to register their interest to join our network of potential angel investors. This is a call to action for anyone committed to advancing diversity and inclusion in the investment world.

In a landscape where regulatory changes threaten to deepen existing disparities, initiatives like ours aim to build bridges, ensuring that diverse and underestimated founders continue to receive the support they need to thrive.


Regulatory changes, such as the FCA's updated criteria for HNWIs, present significant challenges for the promotion of diversity and inclusion within the investment community. However, they also offer us an opportunity to come together, reevaluate our approaches, and reinforce our commitment to building a more equitable and sustainable future for all entrepreneurs. Join us in this endeavour.

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