Diverse by Default Report Summary

Diverse by Default
A collaborative report
September 2023

About this report
This is the first ‘Diverse by Default’ report. In it, the aim is to set
out a constructive and solution-focused vision and a path for the
startup and the venture capital (VC) ecosystem.
The inspiration for the report stems from discussions with the
ecosystem players across the years. There are reports covering
surveys and fundraising data, though the diversity topic deserves
much more. The goal here was to present an all-encompassing,
forward-looking solutions-focused view.
Diversity doesn’t belong to one group/association/ethnicity/VC/
person. Hence, this report is titled ‘A collaborative report,’ as it
belongs to the community.
Independence and pragmatism were paramount in conducting
research, interviewing, and writing this report. Simultaneously, it
was strived to remain open and collaborative. Next, building an
independent bi-sided lens to view the diversity topic was
prioritized, i.e., people often want to see arguments through
their lens and disregard or overlook other viewpoints. Such
behavior is deteriorating diversity discussion instead of
propagating a healthy outcome.
Thoughts have been put together carefully, though there is no
corner-cut in hitting hard where needed. If this genuinely hurts
anyone’s sentiments, please treat this as an unintended
consequence.
About What Why How Future
The value-add of the report is five-fold:
1. All-encompassing = covers different ecosystem players
2. Solution-focused = exhaustive forward-looking solutions
for different players
3. Frameworks = Establish multiple structures starting with
(1) Diversity mapping, (2) Three tier-framework to
diversity, (3) AA approach to segment solutions, (4) BB
approach for Founders, and (5) CC approach for
Investors.
4. Reality touch points = Comments and quotes from the
ecosystem people on every solution/idea/
recommendation.
5. Real-life examples = Connecting solutions with on-the-
ground examples to make them more tangible.
Diversity is also personalized; hence, this report can’t answer
everyone’s questions. The examples quoted are non-
exhaustive, and the solutions presented are set in stone.
Readers are strongly recommended to assess their diversity
alignment and focus on building their paths.

1. What?
Two essential starting points to the
diversity topic are covered:
(a) What does diversity mean?
(b) What is the current status of
diversity in the startup and the VC
ecosystem?
2. Why?
Establishing the diversity issue is not
enough! There needs to a healthy
connection between diversity and
‘Why’ the issue is big enough to
deserve attention and solutions.
2. How?
‘How’ section is most existential for
report. Three core elements:
(a) ‘Diversity Mapping’ for readers to
assess their diversity alignment
(b) 3-Tier Framework to analyse the
diversity topic
(c) Solutions for various ecosystem
participants
4. Future
Future is what comes after this report.
But more importantly - what aspects or
questions can different ecosystem
players support in answering.
‘‘ Maximum efforts in this
report have been spent on
the ‘How’ section because
that is where the ecosystem
conversation should move
towards to create the most
signi
fi
cant value-add.
Diverse By Default | Page 3

What is diversity*?
Diversity can be described as the representation, in a group, of various facets of identity, including
(but not limited to) race, ethnicity, nationality, gender identity, LGBTQ+ status, socioeconomic
status, ability, religion, and age.
*For a lack of better consensus and for the sake of everyone’s ease of understanding, we are using the word diversity.
Also, we are using the word diversity in the same breath as other ecosystem words like under-represented, etc.
Inspired by the definition used by Deloitte.
One of the issues is that the de
fi
nition
of diversity is not commonly
established or agreed upon.
‘‘ Is the word diversity overused-yes! Too many investors are just
using it conveniently for their bene
fi
t. Neither do phrases like
under-represented and under-funded do justice. The language
implies that white men are at the centre of the ecosystem
Investor, Europe Investor, U.S.
‘‘

What?
Many reports and articles have been
highlighting issues related to diversity in
the startup and the VC ecosystem for a
long time.
Whether we look from the angle of
pipeline or funding, support or
mentorship, networking or connections,
there are stark and visible gaps for the
diverse founders and diverse investors.
Data providers, investors, and tech
companies seldom sponsor or conduct
surveys/reports. The goal often leads to
undeniable numerical data on diversity.
Such data then becomes underlying facts
for countless other blogs and articles.
There are limited additions in this report
w.r.t such numerical ‘What.’ Instead, the
focus was on collecting these disparate
data/information and putting them
together to build an overarching diversity
image. To our surprise, it wasn't easy.
Read on👇
1
3
4
5
6
7
8
10
2
9
11

Diversity discussion is too disparate!
There is limited global comprehensive data on a single time-line.
Black
*
Gender
1.9% = Women-only led
13% = Women (co-
founded)
1% = Black-founded
88% = self-funded Black-
founders (UK)
1% = capital managed by all-
women GPs in Nordics
1% = VC funding was raised
by women-only GP teams
2% = raised by Black VCs
Startup Funding VC Funding
Startup Founders
5% = VC partner investors
are women
15% = VC partner investors
are women
< 1% = Black VC investors
54% of Black VC partners did
so by starting own funds
VC Investors
Ethnicity
0.7% of total unicorn
funding = all minority
ethnic founder teams
Startup executives=2.1% Black
1.4% of unicorns = all minority
ethnic founder teams
Startup executives=2.6% Latinx
The Diversity Puzzle
Global focus
U.S. focus
Europe & UK focus
8
6
6
3
4
11
1 7
4
12
4
9
11
15% = Tech startup founders
are women
5
2
Data figures are captured from different reports. Caution, not every data point is from the same year. Check references for more.
* ‘Black’ is a subcategory in this representation. It is chosen to capture max. data availability. Intersectional data is unavailable for different geo’s. Diverse By Default | Page 6
10

Why?
'What' often leads to 'Why.'
Again, much research has been done that
concretely proves diversity's role in ushering
in better outcomes - for our communities,
companies, and ecosystem.
We couldn't have done a more value-adding
and detailed job than the researchers with
the personalised interview methodology
followed in this report. Instead, the focus
was to establish two critical structures:
(a) Diversity Mapping: After acknowledging
the 'What' and 'Why' of the diversity, readers
need to assess where their ideology falls on
the diversity mapping.
(b) 3-tier framework: connects different
diversity elements - ecosystem players,
solutions, and delivery factors.
1 2
3
4 5
6 7
8
9
10

Diversity Mapping / 1
Having understood the ‘What’ and the ‘Why,’ and having read the two cases above,
assess your diversity alignment and map yourself on the diversity chart.
We have raised money from investors to deliver
outstanding returns so they can pay it forward to their
clients. I don’t have space for emotional investing. I
want to invest in the founders and the business cases
that make sense.
‘‘
Hypothetical case - An established VC
Venture capital is a private club with no easy entry
for us. The percentage of money allocated to diverse
founders is a slap on our face. We should be getting
more allocations from investors. It’s a must.
‘‘
Hypothetical case - A diverse founder
Business focus
Diversity
focus
Where do you
place yourself?
The graph above is an illustrative view.

Diverse By Default
Why is ‘Diverse By default’ position important?
One word - ‘pragmatism.’
When we align ourselves to extremes, it is unlikely to leave
room for collaboration. ‘Diverse By Default’ is a position where
we appreciate each other’s views and, MOST IMPORTANTLY,
make a conscious effort to move forward along a growth path.
Business focus
Diversity
focus
Diversity Mapping / 2
Previous hypothetical case - An established VC Previous hypothetical case - A diverse founder
What does ‘Diverse By Default’ path mean?
• Browse through evidence of diversity w.r.t increased
team performance and better investment outcomes.
• Track internal pipeline w.r.t diversity metrics.
• Track investment outcomes w.r.t diversity metrics.
• Open up discussions with diversity-focused VCs.
• Broaden your negotiation and argument toolkit by
bringing attention to business and investment outcomes.
• Educate investors on the business area or specific geo.
• Focus conversation with investors on joint exploration of
future positive outcomes.

3-Tier Framework
Ecosystem Players:
Founders and VCs are not the only players in the
diversity discussion. It’s also the government,
media, organizations, employees, experts, etc.
Majority of the ecosystem players are covered in
separate sections.
Solutions:
This report has curated and proposed several
solutions for different ecosystem players. The
solution list is by no means complete, though
care has been taken to remain all-encompassing.
Awareness-Action (AA) classi
fi
cation:
All solutions are not created equal and should be
separated based on a logical pattern, making it
easier for everyone to create a workable strategy
for themselves.
Awareness Action
Solutions
Ecosystem Players

Founder Solutions
Following topics are covered:
1. ‘Build Basics’ approach for founders
2. Founder solutions mapping
3. Solution descriptions
4. Connecting ‘Build Basics’ approach with the solutions
The
fi
rst piece of advice I give founders is to learn
on someone else’s dime. Hone the craft in
established or emerging startups. Make mistakes
and assimilate personal learnings. Once you are
prepared - go build your startup.
‘‘
Founder/Investor, UK

Build Basics (BB) Approach
Most diverse founders cite either (a) lack of funding, (b) lack of support, or (c) lack of
knowledge - as their most significant pain points when building startups. This report first
proposes a Build Basics (BB) approach for diverse founders. Six basics that diverse
founders must excel at:
1. Sell it before you build it: Before building upon your idea, test whether you can sell a
version zero. A likely reason for startup failure is not enough demand for the product.
2. Understand the market and the alternatives: It’s more than doing a competitor
analysis. Being on top of future trends and developing own ‘secret sauce’ is the key.
3. Understand what VCs look for: Not every startup needs VC funding. Understand the
alternatives, and if VC capital is the chosen route - be sure of what VCs expect from
the startup.
4. Create better decks: It is easiest for investors to pass on an opportunity because the
deck is poorly articulated or misses critical slides.
5. Raise before raising: It is far easier to anticipate the capital needs and build one’s
investor network in advance than stressing out when only a few months of runway are
left.
6. Build your tribe*: The startup journey is tough. Surrounding yourself with people who
understand and can support you through challenges is crucial.
The BB approach will not solve all issues for the diverse founders but will likely improve
their odds of building a successful startup tremendously.
* Suggestion to include from an interviewee

Goal for founders should be to shift their maximum learning curve to the ‘Awareness’ bucket.
Competition for capital is ruthless. It’s not ‘learning on the job' environment anymore.
Awareness
Action
1
2
3
6
7
4
5
1. Founder Groups
2. Getting-Stuff-Done Programs
3. University Groups
4. Startup Education
5. Ask An Alumni
6. Mentorship
7. Startup Events
8. Raise Before Raising
9. Support Programs
10. Grants
11. Pitch Events
12. Research
Founder Solutions Mapping
Awareness focus Action focus
9
10
11
8
12

Founder
Groups
Important:
• Be quick to judge the value of a group.
• Some groups boast big community numbers, but there is not much activity. While in others, there is too much
self-promotion content.
• Be there to learn and not tarnish anyone. Remember, what you will post - stays in the system.
How to go about it?
• Ask a fellow founder, if they are part of any interesting founder group and if you can be included.
• Most groups also allow early-founders (only with an idea) to become a part of the group.
• Platforms like Slack can be meaningful as there is a record of past conversations. Browse extensively to level-up.
• Such platforms can also help you find your co-founder.
• Examples specific to diversity angle: Female Foundry (Link), Founderland (Link). Communities like
NoCodeFounders (Link) present a more generalist to Founder communities.
What is this?
• Founder focused groups on various channels like WhatsApp, Slack, Discord, etc.
• Primary goal of joining such groups could be building community and knowledge.
‘‘Few female founders tell me that their female-
only WhatsApp peer groups are the number
one go-to source to get support on any startup
topic.
Investor, Europe
‘‘The
fi
rst time I built my app was using React. It took
time. Had I been part of any community - I would
have realized how easy it is to create an MVP with
no-code tools these days.
Founder/Investor, Europe

What is this?
• Focus is on hands-on development and execution.
• A bit newer trend, though can be extremely effective in supporting founders in building their MVP’s, getting traction,
instilling confidence in first-time founders, and building network.
• Such groups can also help you find your co-founder.
Who is doing it right?
Case Study: Nights & Weekends (Link)
N&W absolutely hits the nail in nudging people to get up and get things done. There is no bar on the ideas (people
are creating music albums to building next-gen AI tools). N&W gives creators/builders/founders a framework to work
with and achieve their goals. With a focus on execution, N&W is an enabler for diverse founders who join with just an
idea. Another diversity enabler is that program is free.
Excerpt from their email - "90% of our base started their idea from from zero in nights & weekends. meaning, these
are ideas that otherwise may have never come to life. and, 40% of them want to go on to actually start a legit
company + give it their all.”
How to go about it?
Treat these groups as testing grounds or building version-0 of your idea.
Get-Stuff-Done
Programs
Important:
• Many groups are overwhelming tilted towards software. As a founder, if you don’t want to build tech expertise, focus on finding a buddy.
• Such groups/programs can be very fast paced. Don’t be surprised if you loose steam or enthusiasm. The idea is to keep going.
• Since these groups are melting pot of people and ideas, it’s recommended to soak in as much as possible. You may find an interesting
pivot to your own idea; or might come to conclusion that your idea needs more refinement.

What is this?
• Many engineering and business schools have alumni groups. Think entrepreneurship clubs, startup clubs, tech clubs.
• Because there is a sense of common-belonging, such groups become instant go-to for anyone wanting information,
connections, knowledge, or additional resources.
• Most groups/communities are diversity friendly and can also help you find your co-founder.
How to go about it?
Find about groups from university, or fellow alumni/students. If something doesn’t exist - create it. For example - few
students saw a gap in their MBA program, which didn’t offer any club focused on entrepreneurship. Determined to do
something, they initiated a startup club and organised chapter events. Don’t wait; take the initiative.
University
Groups
Startup
Education
What is this?
Startup-focused education programs are excellent for founders who want to cover the basics. It doesn’t need to be a
formal program or startup knowledge in the broader sense. One can also focus on specific startups topics via excellent
blogs, curated article repositories, and videos.
How to go about it?
Try the free ones first. Don’t get locked up to one program/investor/association. Go for 1-2 programs simultaneously - to
understand the subtle differences in what they teach and hone your ability to question the differences.
Who is doing it right?
YC StartupSchool (Link). Antler Ignite program (Link). Collections like Failory (Link), Founder Secrets (Link), etc.
You need 3X your network, anytime
you need to pull-off a startup task.
Want to
fi
nd your co-founder? 3X
your network
fi
rst. University groups
are excellent way to get started.
‘‘
Investor, Europe
I read venture deals book from Brad
Feld inside-out 3 times. It’s not even that
long. Maybe the data and market has
evolved; but the basics and term sheet
intricacies have remained the same.
‘‘
Founder, U.S.
What about diverse founders who
didn’t go to any university. How are
we enabling them? Education based
bias and discrimination is a real thing
in the VC world.’
‘‘
Operator/Investor, Europe

What is this?
Reaching out to one’s experienced university alums (Founders/Operators/Sector experts) for startup or business-focused
advice is one of the oldest tried and tested methods.
Important
Culture plays a massive role. Example - An emerging VC manager raised millions for his upcoming VC fund in the U.S. by
contacting his MBA alumni. On the other hand - a diverse founder in the EU could not even get his MBA alumni to respond
to his email/messages.
• Using alums to get intros to others (investors, corporate contacts, etc.) could be less effective. Without a healthy
relationship, limited people would be willing to get you introductions.
• It’s a fact that ‘Warm intros are awful for diversity’ (Link)
How to go about it?
Make sure to send a well crafted and thoughtful message with a clear ask. Alums are likely busy in their own lives.
Don’t get demotivated if you aren’t getting any meaningful response. Change the tone and content of your intro
email. You should likely change the format based on the platform (a Twitter message should differ from a LinkedIn
note). Check out examples of crafting a great message (Link, Link, Link, Link). Realize that there is no perfect way of
writing such messages. There is no silver bullet that will get you a reply, every time.
‘‘It’s a numbers’ game. I sent out 80+ emails
and LinkedIn messages to my alumni before
fi
nally getting my
fi
rst meaningful response.
Founder, Europe
Ask An Alumni
What about diverse founders who didn’t go to
any university. How are we enabling them?
Education based bias and discrimination is a
real thing in the VC world.
‘‘

What is this?
• Mentorship not only works in the corporate world; it also works wonders in the startup world.
• Ideally, everyone should have at least one. A founder 2-3 steps ahead of you could be of great help.
How to go about it?
• Look for these = 1. Can you respect the mentor? 2. Is the mentor helpful? 3. Is the mentor knowledgeable?
• First connect with people in your immediate network (LinkedIn contacts, alumni, 2nd-degree network). Expand
your horizon thereafter.
Mentorship
‘‘All my co-founders and I have at
least 2-3 mentors. We have
mentors for different areas of
our startup e.g. M&A mentor to
help us understand potential
exits scenarios and what unicorn
startups look at before acquiring
smaller startups such as ours.
Founder, Europe
Important
• Having 2-3 mentors is a luxury for most founders. Aim for having at least one.
• With mentorship, issue is about the fit (mentor-mentee).
• Instead of finding a perfect fit, start with someone you can trust and is helpful.
• Don’t make mentorship a uni-directional relationship. Offer your support to the mentor.
• Beware of mentors asking for startup equity.
• Separate the board membership topic from mentorship.
Language is so crucial to
fundraising. More decisiveness will
pull conversations in diverse
founders' favor. State your track
record unapologetically.’.
Operator, U.S.
‘‘
Women need to speak up
more. Especially the ones
who are role-models. We
need all - we need the brash
ones, and we also need the
articulate ones. Plus, more
voices from the non-startup
world, like Sports stars. It’s
not the time to be polite.
‘‘
Founder, UK
Founders who don’t want to be
labeled ‘diverse’ - understood!
However, also think about
inspiring others by sharing your
stories and journeys. Do it for
others, if not for yourself.
‘‘
Operator, Europe

What is this?
In-person, hybrid, and online events + meet-ups which are not specifically focused on startup pitching.
How to go about it?
• Treat them as one of the best ‘awareness’ recipes out there.
• There are many online startup events happening at any given time. It’s the best equalizer for any diverse founder who
can attend from anywhere in the world and get the same content as everyone else.
• Keep an eye on social media, especially on top VCs in your area - as they organize sessions worth attending.
• Also, great to attend multiple IRL events, early in your startup journey, if they happen in your city.
Startup events
‘‘Product was front-and-center
for my startup. I attended
multiple online sessions on PLG
topic. There are so many great
Product in
fl
uencers on LinkedIn
who also hold sessions. Plus,
Lenny’s Slack community and
online newsletter are awesome.
Founder, U.S.
Important
• Go with an outcome mindset in such events and take notes of the top takeaways. Implement them.
• Attending many events without a plan will lead to exhaustion and frustration.
• Not all events are created equal. It is a good sign if fellow founders or investors recommend an event.
Diverse founder-support-events
have become what CSR was
fi
ve
years back. It’s good for the
VC’s image. However, too much
coaching is delaying fundraising
and confusing founders. Plus,
some events are asking for
money from Founders. This
should not happen.
‘‘
Founder, UK
‘‘You do see women and
minority groups in different
startups and investors events,
however, it is not enough. The
event organisers need to focus
on setting up diverse panelists
and inviting diverse audience
in the ecosystem.
Operator, Europe

What is this?
• If founders start raising when they need capital, it is already late.
• Especially for diverse founders who constantly find it difficult to raise capital, irrespective of the environment
• Hence, if you can - raise before raising. It means (1) anticipating your funding needs, (2) building network among
potential investors months/years in advance, and (3) keeping them informed via regular updates.
• Pitfalls - Investors don’t reply, and founder gets frustrated; Or founders can’t keep the interest alive e.g., no regular
communication
Raise Before
Raising
We participated in a ClimateTech
founder showcase. We didn’t win or
anything but we got contacts of all
angels who attended. We reached
out and asked for their time,
feedback. By the way we were
raising all this time.
‘‘
Founder, Europe
I had no pre-built connections in the
investor ecosystem. So I used the
funnel system. On average, for
every 50 investors I reached out to,
ca. 11 replied and 7 converted to
fi
rst time calls. When we actually
started raising, 3 did DD on us and
1 invested.
‘‘
Founder, U.S.
The best time to start raising was
when you thought about the idea.
The next best time was yesterday.
‘‘
Investor, Europe
This strategy execution should be tactful.
Don’t exhaust all your contacts without
getting any meaningful investor interest.
Investor, Europe
‘‘
Founders should raise from
investors who are best aligned
with their business idea and
personality. It’s a long-term
relationship. Fundraising shouldn’t
be an outcome of the founder’s
diversity alignment.
‘‘
Investor, UK
Founders can gain better access to funding with diversity
focused funds. However, if the cap table consists of
'only' diversity focused funds, one might question 'why'
and it can subconsciously become 'signaling effect' to
established VCs of emotional investing. It's a thought,
balancing act. So pick the best diversity focus investor
who brings value beyond capital.
‘‘
Investor, UK/Europe
Instead of a ‘spray and pray’ approach with investors,
founders should
fi
rst arm themselves with more knowledge
about the investors and their investment preferences.
‘‘
Founder, UK

What is this?
Largely supported by VCs (a) sector specific startups, or (b) focused on element of diversity e.g. female-only.
Example: Sie Catalyst (Link)
How to go about it?
• Make sure to align your fundraising timelines to join this type of program a few months ahead of the fundraise to make
the most value out of the programs.
• Be mindful of which programs you attend and speak to past participants and other founders. Some programs only add
value with mentorship; others can truly move the needle for your fundraising and expand your investor network.
Support
Programs
Grants
What is this?
If you are eligible, government grants or perks from other
associations are a must-have, especially in Europe, where grants
from organisations could be sizeable.
How to go about it?
Getting grants is a challenging feat, too. First, ask around in your
founder network. After getting inputs from various sources, file
for a grant. Once rejected, it can make it tough to get it.
A VC organized a funding-
readiness program but did not
follow up with any VC funding
commitment. It’s like stopping ten
steps away from the destination.
There is so much advice but not
enough capital. Founders need VCs
who invest.
‘‘
Founder, Europe
My co-founder has a doctorate. So,
he knows well how to write grant
applications. We have survived on
such grants, but they are insuf
fi
cient
for our growth phase.
‘‘
Founder, Europe
I didn’t opt for the incubator in my
city because it had just 5% females
in the program. I joined one in
another town because it had a better
ratio. Besides family considerations,
what matters in my startup is the kind
of people I surround myself with.
‘‘
Founder, Europe
Don’t paint founders with the same
brush. Some of us have little/no
network and limited knowledge due
to our backgrounds. But VC event
invites and outreaches are happening
more for those who already know
better. There is a mismatch.
‘‘
Founder, UK

What is this?
In-person, hybrid, and online pitch events
How to go about it?
• Treat them as virtual playgrounds. Listen to a pitch and run a mental analysis. Try to answer the following
questions - What is missing in the pitch, and what could have been better? Note what you loved about the pitch.
• YouTube has numerous past pitch videos from accelerators, pitch competitions, etc.
• Search for terms like ‘startup pitch’ on Eventbrite, and you will see tens of online events.
• Also, attend international online events in your business area. Most have low or no fees for founders.
Pitch Events
Research
What is this?
Research is about maximizing awareness - what is missing in the market? What better can be done w.r.t
competition? How to develop one’s secret sauce? etc.
How to go about it?
• VCs announce their investments in new startups. Understand why and read their investment memo’s.
• Tools like Crunchbase has a huge list of startups and their funding - all updated regularly. If you don’t
have access, follow magazines/platforms like TechCrunch, EU-Startups (Link).
• Look at market maps and sector reports. Examples: Holon (Link), Dealroom (Link), CBInsights (Link)
Five months before starting my
company, I attended every online
pitch competition, there was. I
massively boosted my con
fi
dence in
pitching, and these pitch events
became a way for me to do
competitor analysis.
‘‘
Founder, Europe
If only the startup team I chatted with
this month had researched the market
well, they would have known there are
already tens of climate analytics
platforms. Plus, they could have
answered my question better - ‘What’s
your secret sauce.
‘‘
Investor, Europe
Choosing the location of the startup
can also have an impact on the
founder’s success. How is the
community in the city? Is it a melting
pot of people and ideas? Is there
an open mindset?
‘‘
Investor, Europe

1. Sell it before you build it
2. Understand the market and the
alternatives
3. Understand what VCs look for
4. Create better decks
5. Raise before your raise
6. Build your tribe
Connecting BB approach with solutions
Founder Groups, Getting-Stuff-Done Groups, University Groups
Startup Events, Pitch Events, Research, Educational Programs
Educational Programs, Founder Groups, University Groups, Ask A Mentor
Pitch Events, Educational Programs, University Groups, Ask An Alumni,
Ask A Mentor,
VC Support Programs, Educational Programs, University Groups,
Ask An Alumni, Ask A Mentor
Founder Groups, University Groups, Ask A Mentor, Ask An Alumni,

More quotes
Every diverse founder I know has views on the topic,
but they either don’t get the right platform to voice
their thoughts or, more importantly - no platform is well
designed for them to speak out openly without fear of
repercussion. When one of us gets too frustrated, vent-
outs happen on social media. There should be a way of
resolution between those extremes.
‘‘
Founder, Europe
Geopolitical tensions shouldn’t come in between
speci
fi
c topics like startups and diversity. If we are
favouring/rejecting founders from a particular country,
we are just trying to close one diversity gap but
opening up another discrimination angle.
‘‘
Diverse founder-focused groups need to balance
discussions carefully. It shouldn’t become a bubble of
emotions and shouldn’t only be used to vent.
‘‘
Investor, Europe
We don’t have an underrepresentation issue; we have
an underestimation issue. There is an unconscious bias
to underestimate diverse founders in achieving results
at par with anyone else. We are not creating enough
data points.
‘‘
Investor, UK
Throwing money at the issue is not the perfect solution.
We need ‘Diversity’ in thoughts and minds.
‘‘
Investor, Europe
The media is glorifying unicorn founders. Stop building
with the sole aim of becoming a unicorn because many
aspects, like luck and timing, play a role. Instead, we
should focus on building an ecosystem where we can
fail better.
‘‘
Investor, Europe
We need people like Michael Jackson (link) who have
a social media presence and don’t shy away from a
taking a critical view of what they see wrong in the
ecosystem.
‘‘
Founder, Europe
Venture Capital is actually a simple business! Founders
should focus on their product and strive for PMF.
Capital will follow. If founders listen to too much
advice, they forget to build.
‘‘

Investor Solutions
Following topics are covered:
1. ‘Cautious Care’ approach for investors
2. Investor solutions mapping
3. Solution descriptions
4. Connecting ‘Cautious Care’ approach with solutions
We are all smart people. We know the solutions.
It’s not about any missing knowledge. But; are we
all accepting of diversity issues? Willing to solve it?
or, Are we even pushed enough to take action?
I don’t think so. We are too boxed in our
investment mandates.
‘‘
Investor, Europe

Cautious Care (CC) Approach
In this report, a Cautious Care (CC) approach is proposed for investors
(Venture capital firms, Angels, Accelerators, etc.). After this, solutions for
investors are proposed. In the end, solutions are connected with the CC
approach to provide a wholesome 360 degree action plan.
Let’s explain what is CC approach:
1. Cautious: Be mindful of the hidden biases in different parts of the entire
value chain of a VC business. It included the deal pipeline, hiring process,
promotions, evaluation, and investment process.
2. Care: Provide meaningful value by supporting diverse founders and
investors in the ecosystem.
CC approach will not solve all issues but will likely improve the odds of
promoting and investing in diverse founders.

If you look inside many established investors, even basic de-biasing of the
investment process is missing. How do you expect to move the needle?
‘‘
Awareness
Action
1
2
3
4
5 6
7 8
13
12
1. Diversity Aware IC
2. Compensation Equality
3. Diversity Aware Pipeline
4. Maximise Feedback
5. Promote Incoming Talent
6. Training Programs
7. Portfolio Diversity Data
8. Investment Diversity Data
9. Associations
10.Certifications
11. Wider Adoption
12. Investor Support Programs
13. Diversity Focused Funds
14. Diversity Quotas
15. Support Diverse VC Investors
16. Founder Office Hours
17. Dedicated Person/Page
18. Dedicated Policy
Investors Solutions Mapping
Investor, Europe
Awareness focus Action focus
11
8
9
10
14
15
16
17
18

What is this?
Raise cognitive diversity of investment decision makers. De-biasing approach should aim to mitigate individual investment
committee (IC) member biases by curating standardised questions, insights and analysis through a rigorous process.
Draw inspiration from other asset classes were time and again research has proven that negative outcomes are associated
with conscious and unconscious biases.
Everyone likely struggles with biases, more often than not. An investor mentions an arrogant founder here - (Link). Similarly,
it is not difficult to get swayed away by emotionality, looks, and connection - all likely pitfalls for founders.
Diversity
Aware IC
Compensation
Equality
What is this?
Equality in compensation is not only for employees of VC firms
but also pushing equality in compensation inside portfolio
companies.
Portfolio companies are more attuned to listen to investors.
Pushing for equality in compensation will make for a better level
playing field in the portfolio companies. It will positively influence
internal team satisfaction and startup business outcomes.
How will diverse founders win
when late-stage VCs invest largely
in repeat founders these days?
Most repeat founders are white
males. There is no winning circle
for diversity here.
‘‘
Investor, Europe
There are compensation
discrepancies for diverse
folk in the tech and the
investor world. Full stop.
‘‘
Operator, Europe
There is a pipeline issue. At pre-seed, most
startups don’t have many KPIs or traction to
show. Diligence, by default, hinges on
evaluating diverse founders - which is an issue
in itself. It then exacerbates pipeline problems
as even less diverse founders reach later
stages.
‘‘
Founder, UK
Ecosystem has come a long way - from
‘No attention’ to ‘More attention.’ It takes
time, and then it happens very fast. But
w.r.t on-the-ground fundraising numbers, I
haven’t seen any meaningful difference
pointing to any sort of signi
fi
cant change.
‘‘

What is this?
• A typical established pattern is investors selecting startups from their extended networks.
• A practical approach could be to partner up with diversity-focused investors and see their deal flow.
• Another method could be consciously reaching out to lesser-known deal sources or becoming more visible on
social media to support diverse founders. Expanding deal pipelines enriches the inflow, increasing the likelihood
of funding them.
Diversity
Aware
Pipeline
Maximize
Impactful
Feedback
What is this?
• Investors have a startup funnel. Eventually, they only invest in ca. 1-2% of the deals they see. How
VCs look and interact with the remaining 98% of startups matters significantly!
• Expand the feedback funnel, especially for diverse founders, to 100%.
Impact
An apt, insightful, and truthful feedback can work wonders for the founding team.
There is genuine apprehension on this topic as well (Link).
I see upwards of 1000+ pitches a
year. That’s more than 2.5 pitches a
day. It’s impossible for me to give
detailed feedback on each. There
should be a way through which VCs
can adopt a few diverse startups to
support. That could help.
‘‘
Investor, Europe
Founders crave genuine, tangible
feedback on improving their decks
and pitches. Do they get it - No! Most
times, they walk away with generic
answers and rejections. Maybe we
don’t need more startups. Perhaps we
need to vitalize the startups we
already have.
‘‘
Founder, Europe
Putting founders in categories is
an ‘effect’ of decision-making. It
might make it ef
fi
cient for some
in the ecosystem, but it takes out
critical thinking to judge
people+opportunities effectively.
‘‘
Investor, Asia

What is this?
Three ways to effectively promote incoming talent
1. De-bias hiring pipeline. A lot of content is available on how to do this well.
2. Train more diverse candidates via internships and residence programs.
3. Build and promote internal diverse candidates.
Promote
Incoming
Talent
On-The-Job
Training
What is this?
• Training programs apply in general to all investors,
not just diverse hires. It’s about training them on
diversity-awareness topics or building their skills in
practical investment analysis.
• Buddy systems, peer-networks, external coaching,
and certifications are excellent training forms.
We are, by nature, global and
have an outward outlook. We
balance men and women
50-50 in ICs. We have made
sure women are in leadership
positions. We have a diversity-
centric hiring process.
‘‘
Most VCs project diversity by
doing a lot at the most junior
levels, think internships, analysts,
etc. When we talk about
promoting to senior or partner
levels, they have questionable
performance.
‘‘
Founder, Europe
VC is a challenging and competitive business. Not
all analysts will become Partners. There also
needs to be a higher self-awareness amongst VC
employees. Many have taken over senior
operating roles in startups. We need to make this
jump look and sound - ‘cooler.’
‘‘
Investor, Europe
Discussions on diversity are ongoing in
the VC ecosystem. However, execution
is missing or low. Too few female VC
Partners who have check writing ability.
Plus, associates don’t have the power
to push the deals through.
‘‘
Founder, UK

What is this?
Establishing the baseline diversity data for portfolio companies can be very effective in pushing the topic
forward. To make this easy, include the ‘diversity data’ topic in initial discussions while investing in the
startup. Data examples: Hiring pipeline data, compensation data, and other abstract employee data like
gender, ethnicity ratios, etc.
Portfolio
Diversity
Data
Investment
Diversity
Data
What is this?
• Investors have a startup funnel and publishing data+KPIs on topics like diversity in startup leadership,
deal flow, and final investment portfolio diversity - is powerful data-driven approach to supporting the
ecosystem. It can also become a strong pull for diversity-aware LPs.
• Uncovering data: Is this why women-led startups aren't getting funded? - Link. Frontline Link - as B2B
VC majority of deals they saw were not within their scope.
• Some examples to showcase: Link
I’m nervous to ask my portfolio
companies about diversity KPIs
because I know not much is
happening there. It’s a neutral
topic for them, and I don’t want
to change that. I want them to
focus on business.
‘‘
Investor, Europe
Data is becoming a powerful tool
for VCs. Tracking all kinds of data,
not just diversity, has a great
potential for us to differentiate and
add alpha.
‘‘
Investor, Europe
If we peel the layers of underfunding, we
might uncover lesser-known reasons. We
crunched our community data two years
back and realized female founders
primarily build consumer-focused startups.
However, VCs were funding mostly B2B
Enterprise SaaS.
‘‘

What is this?
Associations like the BVCA in the UK and NVCA in the U.S. have dedicated efforts to promote diversity in the startup and
VC ecosystem. NVCA also launched VentureForward non-profit, which organizes initiatives like LP office hours.
VCs should aim to become part of diversity-focused founder associations, not only investor-focused associations. They can
closely work with them and join discussions to aid knowledge dissemination.
Joining discussions on various forums is just a starting point. Having a voice and opinion is next. Enabling employees to
speak up on the topic and voice VC firm’s thoughts effectively keeps the discussion going.
Associations
Certi
fi
cations
What is this?
• Getting certified in internal VC processes is another approach to aligning with diversity.
• Diversity VC standard (Link) is one such example. Then there is IIWC Investing in Women Code (Link)
which allows organisations to become signatories and embed certain standards internally.
• Maintaining regular dialogue with different VC firms can help establish best practices even without
certification.
There needs to be more formal startup/VC
associations in Europe which also have a focus
on diversity. One can see positive movements as
discussions are increasing. But a long way to go.
‘‘
Investor, Europe
Certi
fi
cations and associations can be costly
endeavors for emerging managers. If there was a
discounted option available, many would consider
joining. Otherwise, it’s just an elitist VC play.
‘‘
Investor, Europe

What is this?
Looking at each country's fundraising landscape, we will see an overwhelming tilt towards one-or-few cities. The
same is the case with business areas in which investors are investing. There are specific 'hot topics' where most
like to invest, and the fight is on for the rest, e.g., while many investors focus on healthcare, FemTech needs to
get the focus it deserves.
Widder adoption w.r.t investment thesis is an effective way to start capturing the edges of the issue. Example:
Instead of looking at FinTech alone, investors should begin exploring FinTech's intersection with ClimateTech and
promising startups in those areas.
Wider
Adoption
Investor
Support
Programs
What is this?
There are multiple ways we can support investors
1. Nudging and supporting more diverse folk to become angels in
startups. Programs like ĀVA (Link), AngelInvestingSchool (Link), She
Angels Series (Link), Black Venture Institute (Link), Fempire (Link)
2. Supporting diverse talent in the VC ecosystem to succeed. Programs
like IncludedVC (Link), Newton Program (Link), VC Include (Link).
3. LP education programs to make them aware of diversity and the
untapped opportunities.
Europe is about a decade behind the
U.S. and the UK on diversity. In
Europe, we are mostly stuck on the
‘Gender’ topic in diversity
conversations. Ethnicity and other
issues are standing in the line way
behind.
‘‘
Founder, Europe
Due to lower tech salaries, there are
fewer angels in Europe. Compare a
U.S. engineer's compensation and
personal spending with a European
engineer. You will get what I'm saying.
‘‘
Investor, Europe
Part of the LPs' reluctance is that
they haven't dealt with a diverse
geography or market before. But
they won't know on their own. One
part of the solution is - LP
education, communication, and
coaching.
‘‘
Investor, UK
Diverse founder funding is a systemic
problem. Diversity is people-oriented
but this funding imbalance is structural.
We can’t just solve it by people calling
us with different nouns, nor it can be
fully solved by trainings. We solve it by
positive actions.
‘‘
Founder, UK

What is this?
Building a diversity-focused fund (centered on topics like female founders, immigrants, or geographical regions) can be an
effective solution to tackle one of the biggest challenges of the ecosystem - capital availability for diverse founders.
A few points to think about and discuss are (a) Supply vs. Demand (how many diversity-focused funds are required to fulfil
the supply of startups); (b) Stage imbalance (most diversity-focused funds are smaller sized and focus on Pre-Seed/Seed
stage; leaving the fate of diverse founders, in the late stages, to established VCs); and (c) Signalling (having diversity-
focused funds on cap-table should signal strength of the startup and not emotional investing); and (d) Labelling (a diverse
founder seeking funding from diversity-focused funds should not be treated dismissively by other VCs).
Diversity
Focused
Funds
Diversity
Quotas
What is this?
Embedded within the investment thesis could be
diversity-focused quotas. They could be hard-coded
into the VC thesis with specific limits. However, to ease
the implementation and to make a healthy start, such
quotas can be established as softer-goal posts.
Sometimes, asking LPs' capital for a
diversity-fund feels like charity. It
shouldn't feel that way. One LP
argument went like this - "The U.S.
VC I know has many top-tier
contacts, so why should I give you
the money?" It's not an apples-to-
apples comparison.
‘‘
Investor, UK
Quotas and diversity-focused
funds can become controversial.
Look at the current case of the
‘Fearless Fund’ lawsuit in the U.S.
How should we, emerging
managers, keep working
effectively?
‘‘
Investor, U.S.
The Venture Capital industry is on a
transformational path. Diversity-
focused VC funds play a role in the
short-mid term because a section of
founders strongly associate with this
topic. However, many diverse
founders don’t like to be labelled as
such.
‘‘
Investor, Europe
GPs need to resonate well with LPs for them to
receive funding. The issue is LPs might not
understand some of the diverse manager’s core
business areas or geo’s. We need to have more
discussions in conferences on such topics and
increase LP participation.
‘‘
Investor, Asia

What is this?
• Established investors have seen it and done it all. Supporting emerging managers with the knowledge and LP contacts
can go a long way.
• Many VC investors also invest in new and upcoming managers (as LPs) - referred to as Seeding. It is a way to capture
broader deal flow and supports developing a more diverse ecosystem.
Collectives: This is a newer trend where VCs (including emerging ones) come together to build a collective. Submitting
deal/startup to the collective means, deck is presented to all VCs in the collective. Example: SeedChecks (Link). Suggestion
is to form similar collectives for diversity-focused VCs. Combining forces and sharing resources with other investors is a
great way to attack funding issues for diverse founders.
Support
Diverse
VC Investors
Founder
Of
fi
ce
Hours
What is this?
More and more investors are holding office hours to educate and support diverse founders.
The momentum behind such an initiative is enormous. Typically, one session can be dedicated to a single
founder topic, and participants can be asked to send questions in advance. If possible, do recordings.
Experiment with office hours on social media platforms to see what gets the most attention.
The
fi
rst believer in my Fund 1
was another established
investor in the ecosystem. He
invested in me and gave me
contacts for other LPs. It was a
perfect start to my VC journey.
‘‘
Investor, UK
Some VCs want to support with stuff
like ‘female-founder-hour.’ It’s a step
in the right direction with much
potential, but it isn’t happening
effectively. For example - there is no
follow-up mechanism, and advice is
sometimes generic.
‘‘
Investor, Europe
We VCs keep repeating the same
basic fundraising and startup stuff on
social media. It’s actually crazy how
common it is among investors. Worst -
still, so many founders make the same
basic mistakes. This is beyond my
comprehension.
Investor, Europe
‘‘

What is this?
• Since diversity is a crucial topic, it makes sense for bigger VC investors to dedicate a contact person on
the topic. Founders can reach out for more than just fundraising questions. It doesn’t need to be
someone dedicated full-time; instead, someone in the team who is enthusiastic to work on the topic
along with the founders.
• The key is to enable this dedicated person with a central repository of all perspectives aligned to one’s
VC firm. It could include answers to common founder questions, documents, links to top resources,
templates, and more.
Dedicated
Contact
Person
Diversity
Policy
What is this?
• Having a dedicated person is a good start and could be a stepping stone to building a dedicated
diversity policy for one’s VC firm.
• It helps in setting clear guidelines and processes internally. It also acts as a good talking point with
diversity-aware LPs.
• Example: 2150 (Link)
Setting up a central knowledge repository was a good
value-add for us. Topics like - What does my VC
fi
rm
stand for? What are our thoughts on important issues
like fundraising? - are all captured.
‘‘
Investor, UK
Let’s start with a simple task. Let’s all publish our internal
diversity policies publicly. If someone doesn’t have it already,
then create one. It will be a game-changer.
‘‘
Investor, Europe

1. Cautious about diversity in deal pipeline
2. Cautious about diversity in investments
3. Care by supporting diverse founders
4. Care by supporting diverse investors
Connecting CC approach with solutions
Diversity aware pipeline, Maximise Feedback, Training Programs,
Dedicated Person/Page, Dedicated Policy
Diversity aware IC, Investment diversity data, Training programs,
Promote incoming talent, Certifications
Wider Adoption, Diversity focused funds, Diversity Quotas,
Dedicated person/page, Founder Office Hours, Dedicated policy
Support Diverse Investors, Investor Support Programs,
Associations, Portfolio diversity data

More quotes
VCs receive pitches all the time. Diversity is not the
primary reason for rejection - likely, it’s others like
PMF, FMF. However, I do think there is unconscious
bias at play. Example: A VC who has never worked
with a female CEO might not see an all-female-led
startup favorably. The key to this is more multicultural
investing teams.
‘‘
Investor, UK
Anonymized pitch decks or using AI to score decks are
a few ways to remain objective when assessing diverse
founders.
‘‘
Investor, Europe
Remove bias in investing by focusing on founders'
updates for the last 12 weeks. Check the quality of
updates and KPI growth. Hide names!
‘‘
On - startup selection
On - removing bias in investment analysis
Founders are getting rejected in fundraising left and
right in the current environment. Diverse founders are
impacted hard, but I don’t think diversity plays much of
a role in the challenging environment. I have rejected
many white-male founders. Investors are just trying to
protect their a**es.
‘‘
Investor, Europe
Impact, investing, and returns can go hand-in-hand.
‘‘ Investor, Europe
There is extra focus on diverse emerging managers. If one of
us makes a small mistake or underperforms, the bullet is shot
on all of us. The stakes have become much higher for us to
deliver.
‘‘
Investor, UK
LPs are the key to solve for the diversity topic. And all GPs
listen to LPs - that’s the key. LPs can also back micro
managers or emerging managers who are focused on
investing with a diversity lens.
‘‘
Investor, UK
For LP’s, one issue of investing in "diverse" managers is they
can't conceptualize it if they can't visualize it. One solution is
to make more LPs. That's what's started to happen with new
Angel training programs.
‘‘
Investor, U.S.
On - LP speci
fi
c topics

Startup Employee Solutions

‘‘I have talked with many IT
engineers. Their
fi
rst argument for
shifting to a new country/region - is
higher GDP. What will GDP do if
you can’t grow at your job?
Operator, Europe
Research
Prepare
My
fi
rst job offer was considerably
less than what my other university
friends were getting. I had to
accept just to survive.
Operator, Europe
‘‘ The tech hiring ecosystem in some
regions is slow-moving. It isn’t easy to
shift quickly. I’m forced to be nice to
my toxic boss, fearing not getting my
next job or a bad recommendation.
Operator, Europe
‘‘
‘‘Many of us in the engineering and
tech ecosystem continuously undersell
ourselves in salary negotiations.
There is a cultural aspect to it - do
more with less.
Operator, Europe
If you audit the corporations,
you would 100% see salary
discrepancies for diverse
employees. Extrapolate the
same for the startup world.
Operator, Europe
‘‘
• It is what it sounds like - do in-depth research before interviewing for a startup or taking a job in a new country.
• De-bias your thoughts. ‘Grass is not greener on the other side’ - don’t just look at the positive future outcomes.
• Before accepting, talk with at least six+ people (e.g., from the startup, industry, country ) about the new role.
• Prepare well for your interviews. Don’t forget to prepare for salary negotiations.
• Look at comparable salaries. There are a lot of data points available now via companies like -
Figures Syndio OpenComp Comparably getagora.com comprehensive.io Salary.com
To grow our Tech ecosystem, we must
make it easier for foreign talent to
fi
nd
and get jobs. One way to bring that
change is to speak ‘English.’ It’s more
inclusive and global.
Operator, Europe
‘‘

Media Solutions

Highlight
What’s
Hidden
Articles on diversity should be more frequent. Increased media coverage from different angles can generate
critical awareness. Media should cover not just the ‘fundraising numbers’ or present a rehash of a report.
Some ideas - monthly digest on conferences, pitches-deadlines, diversity-focused events, etc. Monthly
highlights of 50-100 diverse founders. Monthly highlights of 50-100 startups run by diverse founders.
Write More
Go Beyond
Few suggestions on ‘going beyond’
• Instead of publishing an article about 25 active female business angels - Why not list the top 250
female investors?
• Instead of writing just a short background on 30 angels in ClimateTech - Why not write about their
latest investments? What do they look for in the investments? How do startups reach out to them?
• Highlight angels and investors who are ‘hidden champions’, i.e., active and helpful, yet hidden from the limelight.
• The ‘long tail’ impacts diversity positively. That is where the real value-add lies. Sometimes, the angels investing
5K support the startup much more than others investing 250K.
Often, only the portfolio startups from top VCs or
startups with ‘right’ connections are featured in
media articles. That one startup in London is not the
only one working on ClimateTech analytics; there
are 20+ others. Sorry, but this is paid advertising.
‘‘
Founder, Europe
Similar, diverse angel faces are at the top of the
investing lists every year. Their efforts are welcome,
and it is easier for magazines to highlight them. But I
know so many founders whose decks and emails don’t
get a response from these angels.
‘‘
Investor, Europe

Government and Industry Association Solutions

Capital
Like many examples in the past have shown, right nudges or mandatory requirements enforced by the governments can
pull industry together and move it forward in a set direction. Reporting is a key element of this strategy.
Governments are cognizant of the diversity topic - EU report (Link, Link), UK committee (Link). There is also a precedent on
enforcing reporting regulations - EU corporate sustainability reporting (Link). Combining the two, pushing, especially the
LPs who are institutional investors and professional investors, to report diversity data will result in a cascading positive
downstream effect.
Reporting
Guidlines
While government actions typically take time, associations need not sit on the sidelines. They can push
for a ‘Guideline’ adoption and enforce it among its members.
With a certain level of willingness, such an approach can be implemented shortly, as there are existing
examples to draw inspiration from. Example: United Nations PRI’s Asset Owner Charter Toolkit (Link).
There are also others like Finnish Venture Association (Link).
While reporting and guidelines are nudges towards diversity outcomes, capital injection is a concrete action example.
Such government initiatives are late-stage focused Link. To solve for diversity, the answer lies in the early stages.
Being primarily early-stage focused and more diversity-aware, emerging managers can be supported via. allocating initial
anchor LP capital. This unlocks the formation of more startups from diverse founders, increasing their likelihood of making
the deal pipeline healthier and more robust for later stages.
Our industry is lazy. Investors are lazy. Tell me,
when was the last time any investor was happy with
the increased workload? No one likes the extra
burden of reporting. Now, think about the ‘carrot
vs. stick’ analogy. Governmental and LPs’ push is
the best ‘stick’ approach. ‘Carrot’ isn’t compelling
enough—harsh reality.
‘‘
Investor, Europe
Most organizations (trade associations, non-pro
fi
ts, communities)
focused on increasing access to capital for historically marginalized
leaders in asset management are in the process of compiling data
and resources on their demographic and/or asset class, a much-
needed exercise. There is a tremendous need to centralize this data
and reshape the learning process for advocates, accelerating the
unlock of leverage, capital, and impact.
‘‘
Operator, U.S.

Future

Six Intriguing Solutions
Capital answer
Most emerging managers focus on niche strategies and are
diversity aware. However, emerging managers often face
challenges starting up their business. A governmental
initiative to allocate capital (EUR 1-5mil per fund) to
emerging managers as an LP (either directly or via FoFs)
could significantly boost and usher in a new era for startup
buildup.
‘Elder sibling’ effect
Instead of looking at emerging VC managers as a
competition, established managers should instead build a
healthy and mutually beneficial relationship.
How? Regular discussions, knowledge sharing, deal flow
sharing, LP intros, Seeding (invest in emerging managers).
Publish diversity policy
A big unlock is being transparent on diversity topics -
internally and externally. One way to do that is by publishing
a diversity policy. Such a policy can build clear guidelines,
capture essential ingredients of investment processes, and
become an internal north-star to guide the actions forward. It
also acts as a good talking point with diversity-aware LPs.
Awareness shift
Diverse founders need to shift increasingly to awareness
solutions. Following a 'Build Basics' approach and taking a
knowledge empowerment route is one of the best ways to
increase the odds of one's startup success.
Adopt hidden champions
Investors often focus on the top of their funnel. However,
many diverse founders, albeit having solid business cases,
need more feedback and support to level up their pitch.
When VCs adopt a few such startups from their pipelines,
they create an effect that positively impacts fundability. Treat
such diverse startups as hidden champions and support them
to shine.
Collectives
Collectives is a simple yet innovative way to accomplish many
objectives. For example - building VC collectives of diversity-
focused investors can solve a significant issue for founders of
warm intros. Collectives can also help share VC resources
amongst many investors, creating synergies.

Looking Forward
This report raises many questions that are worth
pondering over. For example, the talks around the
‘Signalling’ topic in cap-tables and ‘Labelling’ thoughts
among founders. On the VC fund side, questions like -
How can we better support the growth of emerging
managers? Should there be a push to build diversity
quotas in established funds? And many more. Hopefully,
the upcoming discussions in the ecosystem via
conferences and panels can start to capture these.
The report has been built on agility principles, and the
final product is a deck that, by default, is ‘dynamic.’ It
means there is scope to update the deck as and when
required. Examples: typo = deck updated, new data =
deck updated, awesome suggestion = deck updated, new
feature = deck updated.
Another vision is to publicly track the progress on the ground
for all the solutions mentioned. It requires thinking about a
methodology to capture and highlight such ecosystem
changes. Is it a tech tool? Is it a blog? Is it just social media
updates? All is still undecided. However, there was an
overwhelmingly positive response to the report, and the
interviews were conducted until the last minute of the cut-off
date. There is an opportunity to widen the scope and add
more voices to this collaborative report.
To everyone who discussed the diversity topic while
writing this report, took time out of their busy schedules,
opened up to share deep emotions on the issue, and
genuinely shared a passion for changing the status quo - A
BIG THANK YOU!
The door is always open for feedback to improve this report.

Appendix
Methodology
In writing this report, a personalized interview approach was taken.
It differs from the survey-based or data-driven approach, where
respondents' answers or transactional data underpins the study's
outcomes. At the same time, such survey/transaction-based
reporting style effectively answers the 'WHAT' question of diversity,
though 'HOW' is not thoroughly covered.
Next, interviewees are kept anonymous to empower them to
express their real emotions. The belief here is that the ecosystem is
'heard, but unseen,' i.e., generally, we understand and hear the tricky
corners of the diversity issues, but it remains largely unpublished.
Common starting questions asked during the interviews: (1) What
positives do you see in the ecosystem w.r.t. diversity? (2) Is diversity
becoming dismissive for investors? (3) Is allocating capital specifically
for diversity, effective? (4) Share your diversity-related experiences.
This report is an outcome of 38 interviews/discussions. All
interviewees are considered diverse in the context of this report.
Although detailed data is not captured, - initial tentative splits are
80%-20% EU/UK vs. U.S. interviewees, 70%-30% female vs. male
interviewees, and 50%-40%-10% investor vs. founder vs. operator
interviewees. Due to the constraints of personalized interview
approach, the focus was limited to the U.S., Europe and UK
geographies only. ‘Investor’ is a catch-all term used for VCs, angels,
accelerators. ‘Operator’ is a catch-all term used for startup
employees, association leaders, etc.

Appendix
References
What - Slide
1. Report - The Funding Divide (Link) (Dropbox Descend)
2. Report - Extend Ventures (Link)
3. Report - McKinsey - Underestimated start-up founders (Link)
4. Article - Sifted - VC diversity needs to change (Link)
5. Article - Wired (Link)
6. Article - PrivateEquityReview & Morgan Stanley report (Link)
7. Report - Diversity VC - The Equity Record (Link)
8. Article - QZ magazine (Link)
9. Report - BBG on Seed funding to underrepresented founders (Link)
10. Report - Deloitte - VC Human Capital Survey Link
11. LinkedIn post - Ilya Strebulaev (Link)
The Diversity Puzzle - Slide
1. Article - PitchBook data for 2022 & TechCrunch article (Link)
2. Dashboard - PitchBook (Link)
3. Report - The Black Report, 2020 (Link)
4. Report - State of European Tech, 2022 (Link)
5. Article/Survey - Startup Genome, 2023 (Link)
6. Report - KaufmannFellows, 2020 (Link)
7. Report - Unconventional VC, Data based on 2022 (Link)
8. Article - Crunchbase data for 2022 & Businessinsider article (Link)
9. Article - Sifted & European women in VC report (Link)
10. Article - Women in VC report 2020, Forbes article (Link)
11. Article - Crunchbase data for 2022 & TechCrunch article (Link)
12. Article - Forbes, BLCK VC report 2022 (Link)
Why - Slide
1. Magazine - HBR - The other Diversity Dividend (Link)
2. Report - McKinsey - Underestimated start-up founders Link
3. Report - Illumen Capital & Stanford study (Link)
4. Blog - Forbes - Diversity: The Holy Grail Of Venture Capital Link
5. Report - Illumen Capital & Stanford study (Link)
6. Article - Kaufmann Fellows (Link)
7. Guest Post - Reggie Tucker - Crunchbase (Link)
8. Blog - SpinLab - Why Do We Need More Diversity In Venture Capital (Link)
9. Deloitte report - VC Human Capital Survey (Link)
10. Article - Gartner - Diversity and Inclusion Build High-Performance Teams
(Link)
Photos
Page 1 - Photo by Meagan Carsience on Unsplash
Page 4 - Photo by John Schaidler on Unsplash
Page 11 - Photo by Jaime Lopes on Unsplash
Page 12 - Photo by James Sullivan on Unsplash
Page 25 - Photo by Nakaharu Line on Unsplash
Page 26 - Photo by James Sullivan on Unsplash
Page 39 - Photo by S O C I A L . C U T on Unsplash
Page 41 - Photo by George Pagan III on Unsplash
Page 43 - Photo by Jason Leung on Unsplash
Page 45 - Photo by Frederik Löwer on Unsplash

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