Diversity VC Digest ☕🤑
Your (monthly) digest of all things DEI in venture capital (May’s edition)
A slightly introspective newsletter this month, as we took the time to prepare a follow-up to our 2022 breakfast event: Bridging the Gap Between VCs & Black Founders. This year’s follow-up focus was on black women founders in particular - the most poorly invested in founder groups the world over, and nothing seems to be changing.
“It won’t happen unless someone with a platform brings it there.”
Temilade “Tems” Openiyi
It was particularly poignant as the anniversary of the killing of George Floyd was also this month, on 25 May. We had considered the theme to follow up with all of the Funds who had committed to do better and act on investing in black founders and their ideas, as some way of honouring the symbolism George Floyd’s murder had come to take on in the days and months to follow.
This was not possible. There are no follow ups worth mentioning. So, instead we want to call-in. How can we do better? How can you, as Partners, GPs and LPs, do better? Diversity VC’s philosophy wishes to be rooted in black activist spaces; we want to create community. We, and we collectively, won’t always get things right. Venture will often take the ‘easy wins’, those PR spins that echo hollow, that don't, and won’t, allow us to do better. For an industry predicated on trailblazing the future, we can and must do better. How do we move the conversation from ‘structural racism is bad’ to actually shifting it? Why are - are we? - afraid to speak boldly about what keeps these numbers so low?
So, a slightly longer missive for this month's edition, with lots intended to encourage discussion, but more importantly, action.
We look to trailblazers who believe change is now only possible through actively “affecting the money”. This was from Ian Wright, a legendary figure in English football and prominent anti-racism activist: “It shouldn’t be the case but the only way to get clubs, leagues and sporting bodies to take racism as seriously as they should is to start affecting the money they're earning from the sport”. Watch the interview here.
Chenelle Ansah - Brummell Magazine’s ‘ones to watch’ in 2023 and Managing Partner at LightPace VC - summed up a core part of the problem neatly here:
“According to a report by Financial Times, black women are significantly underrepresented in the UK investment industry. The report stated that only 1% of investment managers in the UK are black, and only a small fraction of that 1% are women. This suggests that the percentage of black women investors in the UK is likely to be very low.”
In case there is any doubt as to the extent that position and power help protect women, especially women of colour, even when they do make it, read Ann Lai’s excoriating public letter following her surprise exit as General Partner from Bullpen Capital: We do “all the things” because we think it’lll protect us. There is much we want to dissect in this shocking announcement and subsequent detail, and we will engage more closely with this as the details develop.
Diversity VC 's freshly launched Diversity VC off-the-record AMA series kicked off with our inaugural guest Stephen Nundy Partner at Lakestar
Each session we speak to the Partners and Executive decision-makers at some of the biggest Funds in the VC world. Diving deep into their commitment to diversity, equity and inclusion, why that commitment matters and how it drives a core part of their winning investment strategies.
Stephen shared his own journey towards recognising the value of DEI and the importance of active advocacy, and how actively managed Diversity Committee’s make tangible change happen. Read Stephen’s insights in more detail here.
Diversity VC & ZINC hosted the first in a joint DEI series, kicking off with: "Diverse Founding Teams: The Building Blocks for Investors & Founders". Shefali Roy, Founding Partner First Look, David Fogel, Co-Founder Alma Angels, Andre Johnsen, Systems Change Manager Westminster City Council, Maria Petnga-Wallace, Equality, Diversity and Inclusion Lead S-RM, and Colorintech, joined us for a frank conversation, nullifying the “pipeline problem”, defying conventional narratives that this is slow progress, and instead exhorting leaders to actually lead from the top with intention and conviction. It really was one to watch, be sure to join us for the next session!
An already exciting month saw our Head of Community and Content speaking at Foundervine’s FounderFest 2023, and then heading on up to the UK’s northern powerhouse city, Leeds, for Climb23 alongside our partners FutureVC, you can read more here. A palpable call to change and energy was present at both events, it will no longer be enough for venture firms to focus most of their time on the same old founders in technical hubs and invest in the same old dealflow. Change is afoot and we were delighted to be representing the best of our Members on stage to lead the way.
We are once again impressed with the bold and important message from our friends at SISTA, if you haven’t already, please click on through for a billionaire’s take on gender parity (!). Diversity VC is proud to be a sponsor at the SISTA Summit, and look forward to meeting many of you there. You can grab your tickets here.
Last but not least! We are excited to see many of you at our two official appearances at the SuperVenture conference in Berlin early in June. We are looking forward to three days full of insight and networking focused on VC and LP perspectives. Particularly exploring valuations and LP allocations and integrating DEI and making impactful investments. Be sure to come and say hello.
Policy trends
Help low paid workers or face curbs to executive pay, fund managers tell UK firms Many of Britain’s largest employers must do more to increase pay for workers struggling with the cost of living crisis or face votes against pay increases for executives, investment managers have warned. Peter Hugh Smith, the chief executive of CCLA, an investment manager for the pensions of charities and church organisations, said many employers were failing “to do the right thing” and meet the “basic standard” of paying workers a living wage.
Highly recommend tuning into Joe Weisenthal’s latest deepdive into crypto and the state of venture: The Naked Emperor Spotify, Apple and CBC
A reckoning / regrouping The question is, was the decrease in activity during 2022 just the afterparty effect of 2021 wearing off? Or is the VC industry just taking a moment to regroup? “Nontraditional investors are slowing their capital deployment to VC amid less attractive risk/return profiles.” The PitchBook NVCA Venture Monitor.
This headline says it all: OpenAI says it could ‘cease operating’ in the EU if it can’t comply with future regulation. But just in case it doesn’t, online commentators plainly lay out why the shaky business model…well, shakes so much. Some samples here (Right to be forgotten laws violations) and here (Copyright laws violations).
Twitter quits EU disinformation code: EU industry commissioner Thierry Breton. "Twitter leaves the EU voluntary Code of Practice against disinformation. But obligations remain. You can run but you can’t hide. Beyond voluntary commitments, fighting disinformation will be legal obligation under #DSA as of August 25. Our teams will be ready for enforcement."
In a sign of the times and things to come (?) climate change is now actively impacting the bottom line: State Farm has stopped accepting homeowner insurance applications in California.
Diversity in venture news
👀 Oop! The most successful VCs are not the ones tweeting!
Warm intros are awful for diversity, so why do investors keep insisting on them?
Felix Capital becomes Europe’s first B Corp certified VC with over $1 billion AUM
Pale Blue VC, Europe’s leading climate tech fund, is making its term sheet public. This transparency, as they say: By making our investment process and terms publicly available, founders are able to access that information, prepare and know our position and process before even meeting with us. This saves time for everyone.Read more here.
Transparency is one key Startup founders report entrepreneurship is raking a toll on their mental health the problem is particularly prevalent in the current, stressful environment of funding cuts and a downturn in the startup world. One of our colleagues, Chapter Lead for LatAm, Meghan Stevenson, wrote: This article made me think of the questions we ask about mental health in the Standard, when we were going over them with the Inter-American Development Bank and they asked us about that. It underscores the importance of valuing our health in a holistic way and the changes that need to take place within our industry to do so. I find myself wondering how we get more VCs to genuinely value transparency & requests for help (particularly re: mental health) without it being a count against the founder. Being honest, I can see multiple sides to the argument here, but do believe we would all do better to have more transparency & support around mental health.
UK’s PE, VC industry falls short on diversity: Diversity in gender and ethnicity has been on the rise in the UK's VC and PE firms since 2021, but representation remains too low, according to an industry report. With the same survey results, but a more positive spin on the headline: Diversity sort of inches up at Venture Capital firms.
How investing in DEI helps companies become more adaptable
Limited Partners and Private Equity Firms embrace ESG: Although being “additive to investment performance” is a major reason to include ESG considerations across the investment life cycle, a wide gap exists between Europe and North America regarding the influence of ESG adoption. Of the LPs headquartered in Europe, 70% agreed or strongly agreed that ESG commitments influence valuation premiums. However, only 38% of LPs headquartered in the US held the same opinions.
23 VC firms, including Tiger Global, commit to a net-zero portfolio by 2050 An insider reports that in private discussions, some partners pushed for a more ambitious target. Plus some major names in climate VC- Lowercarbon Capital, Breakthrough Energy and Khosla Ventures - never signed up
A great deal of benefits come from increased diversity in startups and more established companies. Diverse companies are more likely to retain talent, identify risks and be more profitable, according to the World Economic Forum.
Connecting diverse startups to with legacy companies to drive innovation, with good representation from the Rogue Women’s Fund
Evolution, not just change: The State of Diversity, Equity and Inclusion in the Venture Capital industry The desire for positive change in the venture capital (VC) industry is clear, however there is still much work to be done to advance diversity, equity and inclusion (DEI). Women are making progress, though they are far from parity. Black professionals continue to see limited representation.Diversity is found in junior-level positions.
US VC female founders dashboard In 2022, companies founded solely by women garnered just 2.1% of the total capital invested in venture-backed startups in the US.
500 Global's Diversity VC Unlocked Scholarship; Nigerian media mogul Biola Alabi received the 2023 Diversity VC Unlocked Scholarship of 500 Global, a venture capital firm that empowers people and economies through entrepreneurship. The Stanford University Center for Professional Development hosts an invite-only program for aspiring venture capital executives.
Funds and funding news
In a move that could be part of the “regrouping” VC is having to reckon with, or in a case of ‘eating our own lunch’ (?!) Stride, Axeleo Capital, and Motive Partners, with scout investment from Andreessen Horowitz and Sequoia Capital investment into London’s Triver ushers in £7 million to provide small businesses with working capital
Founders Forum Group has acquired Tech Nation.
The UK government has announced an initial £100m for a Foundation Model Taskforce to help the country build and adopt the next generation of safe and reliable AI models. You can read more here.
ESG management platform Infyos has raised £1m led by Pale Blue Dot.
Can European deeptech give the US and China a run for their money? Europe's deeptech startups haven't managed to seriously compete with international superpowers yet — and there's one key thing to fix if we want to, reckons Silicon Roundabout Ventures' Francesco Perticarari.
Abatable, a two-year-old, London-based carbon abatement startup, has raised $13.5 million from Azora Capital. More here.
Brunch with Vinted’s CEO: “We’re technically IPO-ready”.
Matrix Partners expands new India fund to $525 million
Data-driven early-stage VC Moonfire raises two new funds
Community spotlights
There are sadly no freshly minted Diversity VC Standard community members joining this month, but watch this space as we roll out our new DEI diagnostic tool - many of you are already using your new and improved dashboards for those all important annual Impact Reports. We are looking forward to showcasing those in the newsletter as they release later this year…
Find out more about joining the Diversity VC Standard community and becoming a certified Fund here.
Future VC
New roles for those in your networks looking for junior, including associate and intern, roles at VC Funds - be a guardian angel and share this link: Future VC Jobs Board
Want to post a role? Get in touch here.
Mark your calendars
D&I dates:
Pride Month - June 1 - 30
Volunteers’ Week - June 1
Autistic Pride Day - June 18
Learning Disability Week - June 19 - 23
World Refugee Day - June 20
World Humanist Day - June 21
International Women in Engineering Day - June 23
World Wellbeing Week - June 26 - 30
Eid ul-Adha (Muslim) - June 28
VC Conference dates:
VIVA Tech - June 15-18
Collision - June 26-29
London Tech Week - June 12-16
Money 20/20 Europe - June 6-8
VC World Summit, NYC - June 2
SaaStr Europa - June 6-7
SISTA Summit - June 13
Added value…
You can add the Diversity VC 2023 calendar for a list of the conferences and diversity & inclusion days for the year ahead: here
Working Capital for Climate Entrepreneurs
Fundraising advisors, the good, the bad and the ugly
How VCs optimise email sourcing to find and close better deals
SVB UK’s Venture Capital Term Sheet Market Guide
ILPA Diversity In Action Playbook
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