Now, I’m not saying the venture capital industry has a problem with diversity. But there was the little issue last month when the Berlin NOAH Conference released an all-male speaker line-up. Apparently the organisers are looking into the issue, and are keen to find women who “are willing to present on our big stage”. That’s okay then. Us women do get scared by big stages. Then there was the recent research by #ProjectDiane that told us that of all US venture funding from 2012 to 2014, only 0.2% went to black female founders. And I would hate to point out what percentage of the Business Insider ‘37 coolest start-up CEOs in UK tech’ are white males (hint: a big majority).
This is why I’ve enjoyed attending a couple of events recently, focused on how to improve diversity within the venture capital industry – including by the European Venture Capital Network and a panel at the recent Global Corporate Venturing Symposium, dedicated to exploring how to create positive work environments for professional women and minorities.
Note: this is not a rant about how white, middle-to-upper class men from Cambridge/Oxford/Harvard/MIT/Stanford (delete as applicable) educations don’t make meaningful technology – far from it. But more a look at whether there are ways we can encourage women and people from different backgrounds to enter the venture capital industry, and in turn ultimately improve the above numbers.
What really struck me about the discussion last week at the Global Corporate Venturing Symposium was the term ‘diversity of thinking’. That is, if we encourage diversity within the team – not just in terms of gender, but also ethnicity, education, professional background and sexuality – we will in turn find a greater appetite amongst VCs to invest in different types of teams. We don’t have to go as far as Martha Lane-Fox in attacking bias in venture capital investing, but it stands to reason that humans tend to want to work with, spend time with and – therefore – invest in people who are like themselves.
And it’s tricky – how do VCs balance the desire to back proven successful teams and people they know and trust, with the importance of bringing fresh faces into the technology ecosystem, and in turn break the familiar Old Boy Network?
Collaboration could be one answer. We already see London-based VCs working more with international investors, corporate venture houses, angels and accelerators. This is a good way of bringing diversity of thought to the table and extending the network, in order to meet and consider entrepreneurs from different walks of life.
For example, while it is something of a stereotype to say that London VCs tend to be former investment bankers where Valley VCs are more likely to be exited entrepreneurs, there is probably still some truth in this. Which is why working together on deals can bring different perspectives and ideas. The same can be said of corporate venture houses. WIRED reported last year that ‘diversity funds’ still tend to be the preserve of corporate venture investment, pointing to AOL and Intel’s fund launches. With less pressure on them to produce returns on strict 5-6 year funding cycles, it stands to reason that corporate venture houses have an opportunity to lead the way in promoting, encouraging and then investing in diversity. But venture capitalists could also benefit from this by collaborating with corporate venture investors. Again, this is a trend that is on the rise – which can only benefit entrepreneurs and the technology community.
Ultimately though, the venture capital profession should want to change. It’s far from the only industry recently accused of being ‘pale, male and stale’ (see the art world, film industry and wider corporate culture – it’s not great that of FTSE 100 CEOs there are more called John than there are women) but it is an important industry with a big spotlight on it at the moment. And pressure is growing on investors to back meaningful, different, life-changing technology – see this month’s WIRED cover about the rise of purpose-driven enterprise if you don’t believe me.
Another presenter at the Global Corporate Venturing Symposium was Josephine Goube of Techfugees, who pointed out that getting VCs to understand the need for mobile technologies aimed at the world’s exploding refugee population is nearly impossible – despite the staggering potential market size. This is just one example of the real potential power and impact of venture capital funding.
The fact these conversations are even taking place at events like the Global Corporate Venturing Symposium is a big step forward. But let’s keep talking, let’s get collaborating and let’s make some changes.
In the mean time, let’s just find some women who aren’t too scaredy-cat to take on the NOAH Conference…even if it is big.