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A shocking stat shows venture capital's diversity problem — and there's a 'moral' duty to address it

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Campaigning for change: Check Warner, the founder of Diversity VC. Photo: Peter Matthews

A diversity campaigner told Yahoo Finance UK that venture capital companies have a “moral” obligation to include more women and people of different races after new data showed that tech is still overwhelmingly male.

Check Warner, the founder of Diversity VC, told Yahoo Finance UK: “We’re all very optimistic about tech and what tech can achieve, but very pessimistic when we think that it may only be able to achieve that for a very select group of people.”

European funding 93% male

Warner was talking to Yahoo Finance UK after data compiled by her organisation and VC firm Atomico showed that 93% of venture funding into European tech startups this year had gone to companies with all-male founding teams.

Separately, 46% of women who responded to a survey from Atomico and Diversity VC, part of Atomico’s State of European Tech report, said they had experienced discrimination.

Diversity and harassment in tech have become major issues over the last few years, with the founders of US VC firms 500Startups and Binary Capital quitting over sexual harassment scandals. Books such as Brotopia and reports of Facebook’s clumsy handling of race when censoring content have also highlighted the insular and homogenous nature of much of the tech world.

While the headlines have not been as intense in Europe, Atomico’s data suggests the same problem exists here. Warner said the European venture capital industry must urgently address its diversity problem to ensure it is “building an industry that is for everyone, as opposed to just for the few.”

“They should do it because it’s the responsibility of the people that are funding the future to make sure that that future reflects the broadest swathes of humanity and not just a small segment of it,” Warner said.

‘It’s become much more part of the conversation’

Warner founded Diversity VC last year to promote diversity in the venture capital industry. The non-profit collects data on diversity, works with funds to address imbalances, helps entrepreneurs from more diverse backgrounds get funding, and also helps people from diverse backgrounds get into venture capital through internship programmes.

“Before we existed as an organisation, there was no data at all in the UK on the number of women working in VC,” Warner said. “We didn’t even know how many funds there were in the UK. We had to do that first then work out what the proportion of women is.”

The numbers were bad. Two thirds of UK funds have no senior women and just 13% of partners are female. Diversity VC plans to collect data on ethnic diversity next.

Warner told Yahoo Finance UK she is “optimistic on the VC side because I sense more anecdotally that there’s been more engagement with the issues and more inbound to us.”

“Across the whole spectrum, in the world, this has become such a prominent issue,” she said. “The pay gap legislation highlighted that, the #MeToo movement highlighted a different aspect of it. It’s become much more part of the conversation.”

Diversity VC has produced a “diversity toolkit” with Atomico — a kind of handbook intended to stimulate conversation about diversity within tech companies.

“We want people to use it to start the conversation internally,” Warner said. “We want VCs to use it, to give it to their portfolio companies, and we’re going to be mailing it out to the portfolio companies of all of our funds and the companies in our network.

“It’s designed to be really pragmatic but also have the theory of all of things you might need if you were to have to build a business case and sell it into your board.”

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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