It’s been a year since OneTech launched to back London’s under-represented founders. Following a celebration to mark the event, here’s an overview of what happened on the night, the organisation’s progress over the past 12 months, as well as how VCs can be more inclusive
Last week I visited WeWork on Devonshire Square for an afternoon and evening of celebrating London’s entrepreneurial diversity. It was organised by London startup body Capital Enterprise through its OneTech programme, which launched in September 2018 to provide oft-overlooked female and black and minority ethnic (BAME) entrepreneurs more opportunities. The event itself marked the first anniversary of OneTech.
With the afternoon comprising a series of workshops – including support on ideas, products, and mindset – the focus of the evening was on OneTech’s first year of operation. And it coincided with findings from a new report entitled Venturing into Diversity & Inclusion 2019, which was produced by OneTech and Diversity VC, the not-for-profit organisation created by venture capitalists driven to make the market more reflective of the real world.
In his opening speech to kick off proceedings for the night, John Spindler, CEO of Capital Enterprise, remarked on the entrepreneurial landscape and how it needs to evolve. “The tech scene is doing incredibly well in London but, around two years ago, there was a thing that hadn’t been addressed – the lack of diversity and inclusion,” he said. Addressing the varied guests before him, women and people of colour, Spindler continued, gesturing: “It was full of people like me and not like the audience we have here today, and we decided to do something about that. OneTech is just the start, we’re responding to you.”
The scheme set out with an ambitious target of supporting 200 female- and BAME-led startups by 2020 with everything from mentoring and workspaces to idea-building and scaling, while helping 50 to secure funding. But how is it getting on now? Giving insight from the past 12 months, OneTech entrepreneur-in-residence Emma Obanye said: “From our achievements’ perspective, OneTech has now got a community of nearly 200 entrepreneurs, over 90 companies have been supported – of which £5 million has been raised on the back of that support – and 70 high-value jobs have been created.”
Tahlia Gray is the founder of Sheer Chemistry, an e-commerce channel providing tights for brown-skinned women, and she believes diversity initiatives are sorely needed. “Outside of the OneTech programme, I haven’t seen much representation,” she detailed. “Telling people my idea has often been quite exhausting in terms of having to over-explain the need for my products and justify that there is a demand.” This isn’t an isolated incident. So, when you factor capital into the equation, things can become even more difficult. If prospective partners don’t recognise an individual or their product because it’s not something that they’re familiar with, securing investment will understandably be even more challenging.
When the time came for the presentation of the Venturing into Diversity & Inclusion key stats, Diversity VC report lead Shriya Anand first reflected on the body’s purpose. “I want to take you back to three years ago when Diversity VC was born,” she said. “It came from a conversation with our co-founders Check, Lily, and Travis – and the conversation wasn’t a great one. It was highlighting the sobering fact that venture capital is far from diverse. Most of the VCs today look the same and we had a feeling this was having a knock-on effect for the founders that were being funded.”
Data has been of increasing importance for Diversity VC over the past couple of years, drilling into numbers to really highlight the market’s issue. And the “critical question” the report sought to answer as it reviewed 144 firms in the city was: what are our funds doing? Well, funds need to be doing more for gender diversity to begin with. In terms of the split between males and females in London VC firms, it’s at 71% versus 29% respectively. Compare that to the working population in the city, and that percentage of women rises significantly to 46%.
“In London, 39% of VC funds have no women on their investment team,” revealed Anand. “And a staggering 65% have no senior female representation; key decision-makers like partners. So, in other words, two-thirds of funds in London have only men sitting at the decision-making table.” Indeed, this trend is marginally higher than the national figures, which are at a respective 36% and 62%.
Ethnicity figures are in even more need of improvement, presenting “another clear call to action,” according to Anand. She continued: “The white population is significantly overrepresented in London venture capital firms. When we look at the non-white population, we see underrepresentation, particularly in the black population but also in the Asian population.”
Revealing that the Diversity VC team wasn’t overly surprised by the outcome of the study, and that VCs also admitted they’re aware there’s a diversity gulf, the more concerning thing is that 47% of firms surveyed don’t have any policies in place to encourage diversity during recruitment. Further to that, 43% of funds have no flexible working processes, which means fewer opportunities for parents in the industry to balance their lives outside of the office. “The data that we collected and the conversations we had highlighted that, in some cases, funds were not doing enough, and in other cases funds just didn’t know what to do,” said Anand.
On the back of that, Diversity VC and OneTech constructed a handful of recommendations to give VC firms a push in the right direction, one of which involves appointing a diversity and inclusion champion – a senior member of the business who can ensure any decisions being made are actually inclusive.
Another recommendation was for firms to broaden their networks. “Many of the funds we spoke to said they wanted to look for minority founders, but they just didn’t know where,” said Anand. “We think that’s an excuse, and we’ve listed clear sets of communities in London, like OneTech, that are supporting diverse founders today.”
It would seem that the time for excuses is over and, with the likes of Diversity VC beating the drum for inclusiveness so spiritedly, the change many founders have been looking for may soon come about.